Monti attempts to restore confidence

FORMER EU competition commissioner Mario Monti is rushing to form a new government in a bid to restore confidence in Italy’s finances as markets offered little relief to the premier-in-waiting.

Italian bonds and stocks erased early gains and declined as Monti met with leaders of the country’s political parties to discuss cabinet nominees.

“Uncertainty remains over Monti’s team, the programme and the majority, especially in terms of the conditions that will be requested to assure a stable majority in parliament,” said Gianluca Ziglio, an interest-rate strategist at UBS AG. “The market now expects stability and the restoring of public finances to begin with.”

Europe’s inability to contain a regional debt crisis that started in Greece more than two years ago led to a surge in Italian bond yields as investors bet on which nation may need aid next.

Monti, an economist and former adviser to Goldman Sachs Group, will try to reassure investors that Italy can cut a €1.9 trillion debt load and spur economic growth that has lagged behind the eurozone average for more than a decade.

Monti said talks are proceeding with “great seriousness” and that all parties are aware of their responsibility.