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Italy: Monti's resignation puts Italy back in Eurozone crisis spotlight

December 19, 2012

Heightened political instability threatens to overshadow the reform process undertaken by Italy over the course of 2012 and to put the country, once again, in the front line of the Eurozone debt crisis. On 10 December, Prime Minister Mario Monti announced that he will resign once the Parliament has given final approval to the 2013 budget. Monti decided to step down, when the main centre-right party - Silvio Berlusconi's People of Freedom party, PDL - withdraw its parliamentary support in order to support Berlusconi's decision to run again for office.

Monti's decision sets the stage for snap elections, which will likely take place on 24 February, almost two months earlier than originally planned. However, the pre-electoral scenario remains filled with uncertainty. Monti has hinted at the possibility of running for re-election, but will officially confirm his candidacy only between 22 and 23 December. According to local sources, the Prime Minister's bid for a second term will be backed by centrist parties, whose voter base, however, does not seem sufficient to guarantee Monti's re-election. That said, Monti is expected to receive ample support from the country's business establishment and has been unofficially endorsed by several European leaders.

Meanwhile, since his announcement to run again for the premiership, Berlusconi has followed an erratic course and, at the time of writing, it is still not clear whether he will run for office or not. Berlusconi, in fact, indicated that he could step aside if Monti decides to seek re-election and to lead a coalition of Italy's centrist and conservative parties, although this scenario is becoming increasingly unlikely.

Opinion polls currently point to a victory for the centre-left Democratic Party (PD), whose leader, Pierluigi Bersani, has recently vowed to give continuity to Monti's pro-European agenda initiated in November 2011

Author:, Head of Data Solutions

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