Mario Monti has formed Italy’s new technocratic government, which will be sworn in today at 5 p.m. in Rome. The interim government will be tasked with tackling the crisis that has pushed Italy’s borrowing costs to untenable levels, threatening an economic meltdown that could spread throughout the euro zone.
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Monti’s new government contains no politicians, as he was reported to have wanted, after disputes among parties complicated Monti’s task of forming a Cabinet. Some analysts believe the lack of politicians in the administration will make it more vulnerable to ambushes in parliament as it tries to push through unpopular austerity measures.
However, in presenting his Cabinet today, Monti said the lack of politicians would strengthen rather than weaken the government by enabling it to avoid political disputes and focus solely on the tasks at hand.
“The absence of political personalities in the government will help rather than hinder a solid base of support for the government in parliament and in the political parties because it will remove one ground for disagreement.”
Monti said he will present his austerity program to the Senate on Thursday, after which both houses of parliament are expected to call for a confidence vote.
The reforms Monti will try to push through are expected to have an overwhelming majority in both houses. Still, the process will be closely watched by global markets still nervous about Italy’s ability to tackle its large public debt and slow economic growth.
Italian bond yields recently passed the 7% level at which Greece and Ireland were forced into bailouts. But with the euro zone’s third-largest economy, Italy is too big to for a bailout.
Italian President Giorgio Napolitano nominated Monti for the premiership on Sunday night, less than a day after Prime Minister Silvio Berlusconi officially tendered his awaited resignation. The president has called for an extraordinary national effort to win back the confidence of markets, noting that Italy has to refinance roughly 200 billion euros worth of bonds by the end of April 2012.
Monti said his government should last until the next scheduled elections in 2013, though many expect that politicians will only allow Monti time to implement reforms before calling for early elections.
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“I hope that this government of technocrats succeeds in addressing all the requests made by the European Central Bank in its letter,” said outgoing Industry Minister Paolo Romani, a member of Berlusconi’s PDL party.
“But let it be clear that as soon as that is done, we expect Monti to give the people the chance to choose a government.”