Monday

21st May 2018

Berlusconi toppled, Brussels man installed to run Italy

  • Mario Monti: The new Italian chief is to put in place a lean cabinet of technocrats (Photo: European Commission)

A former EU commissioner has been installed as prime minister of Italy after right-wing leader Silvio Berlusconi bowed to the pressure of financial markets and resigned on Saturday evening.

Mario Monti was appointed head of government by President Georgio Napolitano on Sunday (13 November) to set up a tight cabinet of technocrats with the aim of pushing through radical economic policy changes.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

Monti served as internal market and financial services commissioner from 1995 to 1999 and then took over the competition dossier at the EU executive from 1999 to 2004.

The Brussels man, who in a highly unusual manoeuvre was appointed senator for life on 9 November by the president in order to lay the ground for his installation in the country’s top office, is understood to want to form a slimmed-down cabinet of some 12 non-politicians, although Monti would not say who he will appoint as ministers.

He will begin to approach individuals as early as Monday, with the technocrats expected to be appointed just days later.

"Italy must again be and must increasingly be an element of strength, not weakness, in a European Union that we helped found and in which we should be protagonists," Monti said after his appointment.

The government of technocrats is expected to last long enough to push through spending cuts and an structural adjustment of the economy ahead of elections in 2013, although Monti would not give any schedule as to when the country could return to normal democratic procedure, saying the length of office of the new administration depended on "the actions of the government, the reaction of the economy, of the markets, investors, of the European and international institutions".

Monti, an economics professor, is a committed free-marketeer and has advised Goldman Sachs and the Coca-Cola Company. He is also the European Chairman of the Trilateral Commission, a powerful international think-tank, and made his mark as commissioner by launching anti-monopoly proceedings against software giant Microsoft. He is also a founding member of the Spinelli Group, an organisation launched in 2010 to facilitate integration within the European Union.

Investors began targetting the country in recent weeks as political paralysis over economic reforms in the country pushed Italy's bond rates ever higher. The interest rate that Italy must pay to borrow money soared to over seven percent - the same danger zone suffered by Greece, Ireland and Portugal when forced to take bail-outs from the EU and IMF. The eurozone rescue fund however is not big enough to save Italy.

EU leaders cheered Monti’s unorthodox installation which came two days after an ex-vice-president of the European Central Bank was appointed prime minister of Greece following similar pressure from the markets and eurozone leaders.

"I hope that confidence in Italy is restored, which is crucial for a return to calm throughout the euro zone," said Chancellor Angela Merkel, speaking in Leipzig.

European Commission President Jose Manuel Barroso and EU Council President Herman van Rompuy put out a joint statement welcoming the move, but stating that Brussels still intends to monitor the new Italian government’s economic policies, an oversight role awarded to the EU executive at a summit of eurozone leaders on 26 October.

“We welcome the decision by the President of the Italian Republic to ask Senator Mario Monti to form a government of national unity. We believe that it sends a further encouraging signal – following the swift adoption of the 2012 Stability Law,” they said, referring to the outgoing government’s latest austerity package, “of the Italian authorities' determination to overcome the current crisis.”

Finnish foreign minister Alexander Stubb tweeted: “Great to see Mario Monti take over in Italy. Respected everywhere. Sad to see Franco Frattini go. A great guy too.”

And his Swedish counterpart, Carl Bildt, took to the microblogging service to say: “Mario Monti will bring credibility and honesty to the governance of Italy. He is a friend - and he is warmly welcomed.”

However, whether Monti will be able to push through the cuts and structural adjustment is an open question.

The centre-left Democrats and small centrist parties have pledged their support for the new government and Berlusconi’s party has also committed their backing.

But there is widespread dissatisfaction within Berlusconi’s People of Freedom party over the toppling of their leader and the Northern League has withheld their support, pending more information about what policies Monti intends to pursue.

And Italian news agencies are reporting that Berlusconi had privately told party members: "We can pull the plug whenever we want."

Monti groomed to be Italy's new PM

In a move that is widely considered to lay the groundwork for a transitional government, Italian President Giorgio Napolitano has appointed Mario Monti senator for life.

Italian bonds shatter 7% bail-out ceiling

The interest rate on Italian 10-year government bonds breached seven percent on Wednesday, shattering the psychological bail-out ‘ceiling’. Greece, Portugal and Ireland all had to seek multi-billion-euro bail-outs when their 10-year bonds exceeded this threshold.

Report: Italy to be put under IMF surveillance

Reuters reports that Italy has agreed to be put under surveillance by the International Monetary Fund (IMF) as part of a plan to restore market trust in the eurozone's third-largest economy.

Analysis

EU has no 'magic bullet' against US Iran sanctions

EU leaders in Sofia will discuss how they can protect the bloc's economic interests against US threats to sanction companies doing business in Iran. But their options are limited.

Opinion

EU budget must not fortify Europe at expense of peace

Given the European Commission new budget's heavy focus on migration, border management and security, many are asking whether the proposal will fortify Europe at the expense of its peace commitments.

News in Brief

  1. Trump warns Nato allies' low budgets will be 'dealt with'
  2. Only Estonia, Greece and UK hit Nato spending target
  3. EU to start process to counter US Iran sanctions
  4. Macedonia PM sees 'possible solutions' in Greek name row
  5. EU takes six countries to court over air pollution
  6. New Catalan leader sworn in without reference to Spain
  7. Merkel and Putin revive dialogue in troubled times
  8. European companies putting Iran business on hold

Stakeholders' Highlights

  1. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  2. Centre Maurits Coppieters“Peace and reconciliation is a process that takes decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  3. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  4. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  5. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  6. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  7. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments
  8. International Partnership for Human RightsAnnual Report celebrates organization’s tenth anniversary
  9. Nordic Council of MinistersNordic Cooperation Needed on Green Exports and Funding
  10. Mission of China to the EUPremier Li Confirms China Will Continue to Open Up
  11. European Jewish CongressCalls on Brussels University to Revoke Decision to Honour Ken Loach
  12. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May

Latest News

  1. Athens mayor wants direct access to EU migration fund
  2. Nordics could be first carbon-negative region in world
  3. Zuckerberg and Trump top the EU's agenda This WEEK
  4. Integration of Syrian refugees in Europe needs scrutiny
  5. Bulgarian PM: No asylum reform without stronger border
  6. Eight countries to miss EU data protection deadline
  7. Italian populists to defy EU debt rules
  8. Commission 'playing tricks' with EU budget figures

Stakeholders' Highlights

  1. EU Green Week 2018Green Cities for a Greener Future. Join the Debate in Brussels from 22 to 24 May
  2. Nordic Council of Ministers12 Recommendations for Nordic Leadership on Climate and Environment
  3. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  4. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  5. Mission of China to the EUProgress on China-EU Cooperation
  6. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  7. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  8. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  9. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  10. UNICEFCalls for the Protection of Children in the Gaza Strip
  11. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  12. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight