Italy moves closer to technocrat governance

ROME - Agence France-Presse

The departure Silvio Berlusconi ‘marks the end of a carnival reign,’ says an Italian columnist. REUTERS photo

Italy turned the page yesterday after Silvio Berlusconi’s resignation, with ex-European commissioner Mario Monti set to take over to try and avert bankruptcy in the eurozone’s third-largest economy.

The 68-year-old economist was set to be nominated to lead a technocratic government once Italy’s president completes a marathon round of formal consultations with political leaders due to end at 17:00 GMT yesterday.

President Giorgio Napolitano is racing against time to have a new government in place by the time markets open today, when Italy will face the first bond auction test of the post-Berlusconi era.

Berlusconi submitted his resignation to Napolitano on Saturday, triggering an explosion of joy in the streets of Rome with people dancing in the streets and honking car horns.

‘Berlusconi may look for comeback’

A scandal-tainted, larger-than-life billionaire who has been in power for 10 of the past 17 years, Berlusconi looked visibly shocked as he quit power and said he was “deeply embittered” at the scenes of jubilation.

While he is still a parliamentary deputy, many analysts believe the 75-year-old Berlusconi will struggle to make a political comeback.

“We’re all delighted. We’ve had enough of this person who always acted in his own interests. Italy is headed for a better future,” said 50-year-old Tommaso Romito, one of thousands celebrating in Rome on Saturday.

The departure “marks the end of a carnival reign and the start of a tough and sombre time of fasting in the hope of a Resurrection,” said Curzio Maltese, a columnist for the leftist Repubblica daily.

In an article entitled “A Sad Exit,” Il Messaggero said: “This is the end of a 20-year era in which Berlusconi represented, for better or for worst, the axis around which national political life was organized.”

Business daily Il Sole 24 Ore, said: “A chapter of Italian history that lasted nearly 18 years is over,” while the anti-Berlusconi daily Il Fatto Quotidiano hailed “the end of a nightmare.”

After Rome partied over his departure, supporters of Berlusconi’s People of Freedom (PDL) party rallied outside his Rome residence yesterday, saying: “Thank you prime minister.”

Berlusconi’s announcement on Tuesday that he would resign prompted fears of a prolonged political and financial crisis in the eurozone’s third largest economy that could drag down the entire euro area.

International leaders have pushed hard for Italy to move quickly to form a new government and adopt economic reforms to stave off bankruptcy, after Italian borrowing costs hit new highs.

“There is still work to be done in the broader European community to provide markets a strong assurance that countries like Italy will be able to finance their debt,” U.S. President Barack Obama said on Saturday.

The European Union, which together with the International Monetary Fund (IMF) is now auditing Italy’s accounts, has said the country may need to pass extra austerity measures in order to meet its economic targets.

Italy’s parliament moved exceptionally fast to approve a package of reforms this weekend that Berlusconi had promised to the European Union and whose approval he had set as a precondition for stepping down.

The measures include privatizations and other pro-business incentives but not a scheme to ease firing of workers.

Following Berlusconi’s announcement that he would resign, Italy’s long-term borrowing costs had risen above 7 percent - a dangerous level that could make the country’s debt unsustainable within months.

Reports of Monti’s impending nomination helped ease the jitters but the toxic mix of a 1.9 trillion euro ($2.6 trillion) debt, an extremely low growth rate and high bond rates have raised fears over Italy.