Italy: Mario Monti forms technocratic government
November 12, 2011
After dominating Italy's political arena for 18 years, Prime Minister Silvio Berlusconi resigned on 12 November in response to mounting pressure from international financial markets. Previous attempts to regain investor confidence had failed, as the Berlusconi administration was unable to implement the much-needed structural reforms and quell concerns about the sustainability of the country's debt. On the same day, parliament approved the Stability Law, which Berlusconi had set as a condition for resigning. The bill includes financial stability measures aimed at reducing the debt burden of 120% of GDP in 2010 - the second largest in the Euro area after Greece. The package of economic reforms includes, among other measures, increasing the retirement age to 67 by 2026, the sale of state-owned real estate and the privatization of a number of municipal public services. On the following day, President Giorgio Napolitano appointed former European Commissioner Mario Monti as head of a new technocratic government composed of non-partisan experts. As well as acting as Prime Minister, Monti will also lead the finance and economics ministries. The new government will be supported by all the political forces represented in the Italian parliament, with the exception of the Northern League party Berlusconi's former main ally. The Monti administration faces the task of pushing through further austerity measures in order to relieve market pressure on the country's debt. The new government will remain in office until 2013, when the next elections are scheduled. However, local analysts don't rule out the possibility that Italian lawmakers will push for early elections, thereby giving the government just enough time to approve the most urgent reforms.
Author: Armando Ciccarelli, Head of Data Solutions