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Monti seeks to form new Italian cabinet

ROME (AP) ― Italy’s new premier-designate economist Mario Monti says he will get to work quickly to try to form a new government, assuring the nation that it can heal its disastrous finances.

Monti told reporters Sunday night he will 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.

The former European Union competition commissioner received the formal mandate from President Giorgio Napolitano. Monti must now draw up a cabinet, lay out his priorities and see if he has enough support in Parliament to govern effectively.

Hours earlier, Silvio Berlusconi’s party gave its crucial approval for Monti to assemble a government, but insisted that it last only long enough to implement urgently need economic reforms.

Berlusconi resigned reluctantly as premier 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.

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 choses for his cabinet and what his government’s priorities will be. 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 spoke, 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.

Monti faces a monumental task: preventing an Italian default that could tear apart the coalition of 17 countries that use the euro and send Europe and the U.S. into new recessions.

Italy’s economy is hampered by high wage costs, low productivity, fat government payrolls, excessive taxes, choking bureaucracy, and an educational system that produces one of the lowest levels of college graduates among rich countries.

In addition, as the third-largest economy in the eurozone, Italy is considered too big for Europe to bail out like it did Greece, Portugal and Ireland.

The next Italian government needs to push through even more painful reforms and austerity measures to deal with 1.9 trillion euros ($2.6 trillion) in debt ― about 120 percent of the country’s economic output. And many of those debts are coming due soon ― Italy has to roll over more than 300 billion euros ($410 billion) of its debts next year alone.

Berlusconi spoke Sunday evening to the nation in a televised message, his first public comment since stepping down after 3 1/2 years in office.

“I resigned out of a sense of responsibility and of state, to ward off more speculative financial attacks on Italy,” he said.

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.

Most centrists and center-left parties in the opposition pledged their support Sunday for a Monti government, saying the former European Union competition commissioner has the moral authority and economic know-how to get Italy to pass long-delayed structural economic reforms.

“Italian parties are at fork in the road. Either they speculate on the situation, hoping that they can get some campaign capital from it, or they take up their responsibilities to save the country,” said centrist opposition leader Pier Ferdinanco Casini, expressing hope that a new government could last until elections are scheduled for spring 2013.

But Umberto Bossi said his Northern League party won’t back any Monti-led government “for now.” Bossi said he told Napolitano that his party, whose support kept Berlusconi’s conservative coalition in power for years, will be a “vigilant” opposition to any Monti government until the economist spells out his plans.

“For now, we said, ‘no.’ Then we’ll see the program and decide, time by time” whether to support specific legislation, Bossi said. “In any case, we won’t give him any blank check.”

Bossi’s party has been demanding early elections instead. He also has opposed one key remedy, a pension reform that raises the retirement age for women.

But many financial experts say even the new austerity measures passed Saturday are not enough to revive the dormant Italian economy. They raised the retirement age to 67, but not until 2026. They also called for the sale of state property and privatizing some services but contained no painful labor reforms.
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