'Super Mario' Monti to form Italy government

ROME?? Italy's presidential palace says the economist Mario Monti has agreed to try to form a new government and steer the nation away from financial disaster.

A day after Silvio Berlusconi resigned as prime minister, palace officials announced Sunday night that "Super Mario," a moniker he earned in as a European Union competition commissioner, received the formal mandate from President Giorgio Napolitano.

Monti said Sunday night he would start work immediately and carry out the task "with a great sense of responsibility and service toward this nation." He added that Italy must "heal its finances" and resume growth because today's leaders owe it to future generations.

Monti must now draw up a Cabinet, lay out his priorities and see if he has enough support in Parliament to govern effectively.

Monti, a university economics professor, won crucial backing from Berlusconi's conservative party Sunday, but it demanded that he rule only long enough to implement urgent measures to rescue Italy from financial disaster.

Napolitano tapped Monti in hopes he can quickly assemble technocrats like himself who will reassure the markets that Italy is serious about healing its finances and reviving its economy.

Berlusconi reluctantly resigned late Saturday, bowing out after world markets' pummeled his country's borrowing ability, reflecting their loss of faith in his economic program. Berlusconi quit shortly after the Italian parliament approved new reform measures demanded by the European Union and central bank officials.

Berlusconi's parting plea
"I resigned out of a sense of responsibility and of state, to ward off more speculative financial attacks on Italy," he told the nation Sunday evening in a televised message, his first public comment since stepping down after 3 1/2 years in office.

Looking somber, Berlusconi said he was "sad" that his "generous gesture" of resignation was greeted by "hoots and insults" from crowds outside Parliament. He vowed to keep up his efforts to "renew Italy" through his continued presence as a lawmaker.

Berlusconi made a parting call on Sunday for the European Central Bank to become a lender of last resort to prop up the euro.

"This has become a crisis for our common currency, the euro which does not have the support that every currency should have," he said.

"That is to say a bank which is a lender of last resort and a guarantor for the currency as other currencies have, such as the dollar or sterling. This what the European Central Bank should become if we want to save the euro and with it, Europe."

Angelino Alfano, head of Berlusconi's conservative Freedom People party, said he told Napolitano that Monti has his party's "consensus" to try to form a government. "We have given our willingness to Professor Monti," Alfano said.

But whether Berlusconi's forces will give Monti crucial support in Parliament depends on who Monti chooses for his Cabinet and what will be his government's priorities. Alfano stressed that no opposition members should be in the Cabinet.

"Our preference is for technocrats to join" the Cabinet, Alfano told reporters.

He also added another condition: A Monti government "cannot last longer" than the time needed to implement the economic reforms. Berlusconi and his supporters have made clear they want elections soon, not at their scheduled time of spring 2013.

As Alfano was speaking, a crowd of Berlusconi supporters cheered and applauded the outgoing premier as he got into a car at his private residence in Rome. That was in sharp contrast to Saturday night, when hundreds of Romans heckled and jeered Berlusconi and popped open bottles of sparking wine to toast his departure.

Story: End of an era as Italy?s Berlusconi resigns

Reforms ahead
If he manages to secure sufficient backing in parliament, Monti will push through reforms agreed by Berlusconi with euro zone leaders to cut Italy's massive debt and revive a chronically stagnant economy.

German Chancellor Angela Merkel welcomed signs of an end to the weeks of uncertainty, saying the approval of a reform package in parliament on Saturday was "heartening."

"I hope that confidence in Italy is restored, which is crucial for a return to calm throughout the euro zone," she said ahead of a party conference in Leipzig.

Carrots and bananas for Berlusconi's last supper?

Italy came close to a full scale financial emergency last week after yields on 10-year bonds soared over 7.6 percent, levels which forced Ireland, Portugal and Greece to seek an international bailout.

With a public debt of more than 120 percent of gross domestic product and more than a decade of anemic economic growth behind it, Italy is at the heart of the euro zone debt crisis and would be too big for the bloc to bail out.

Financial markets have responded positively to the prospect of a Monti government and as Berlusconi's departure became more likely last week, yields dropped below the critical 7 percent level.

Monti respected
At the European Union, Monti stopped such corporate giants as Jack Welch and Bill Gates in their competitive tracks.

Elegantly attired with a formal demeanor, "Super Mario" Monti proved his mettle as a tough negotiator when he blocked the merger of General Electric and Honeywell and levied a 500- million-pound fine against Microsoft for abusing its dominant position.

"He moves with caution and speaks with nuances. But he moves," said Carlo Guarnieri, a political scientist at the University of Bologna.

A leading economist, Monti is among the most respected men in the country and the most admired Italians in Europe.

Monti, 68, cuts an austere and serious figure, which people who know him say defies a subtle wit. He is multilingual and moves easily among European capitals. Now the president of Milan's prestigious Bocconi University, he spent 10 years at the European Commission, about half in the powerful post of competition commissioner, and is one of the founders of the Brussels-based Bruegel think tank, which blends research with policy recommendations.

Yet he does not give the impression of being out of touch with ordinary Italians. TV clips show Monti filling his car with gas ? a clear contrast with fumbling responses by lawmakers asked recently by TV satire programs the price of fuel.

In perk-filled Italy, the image of Monti at the gas tank carries more meaning than that of a powerful figure engaged in ordinary tasks, but that of a powerful man who does not seek privilege ? something he says he wants to stamp out.

"By introducing more competition, we will in due course introduce more merit and less of a role for nepotism, clientism, corruption, whatever," Monti said in Berlin last week.

Monti was born in the town of Varese, north of Milan, the son of a bank manager. As a teen, his father took him to see the U.S. and the Soviet Union at the height of the Cold War so he could form a personal view of the two powers.

He earned an economics and management degree at Bocconi and later studied in the U.S. at Yale, and spent years teaching economics at several Italian universities. He is recognized as a champion of the free market and reduced government spending, who has been influential in setting European and international antitrust standards.

"I have always been considered to be the most German among Italian economists, which I always received as a compliment, but which was rarely meant to be a compliment," Monti told a panel on the euro crisis hosted by the Dahrendorf Symposium in Berlin.

? 2011 msnbc.com

Source: http://www.msnbc.msn.com/id/45277728/ns/business-stocks_and_economy/

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