Economist Mario Monti won some pledges of support today to lead a new technocratic government to rescue Italy from financial disaster, but not from the Northern League, a long-time ally of Silvio Berlusconi.
President Giorgio Napolitano, who was talking today with all party leaders, could ask Mr Monti to form a government as soon as this evening, just 24 hours after Mr Berlusconi reluctantly resigned from the premiership.
After days of being pummelled by international investors skittish about Italy’s massive debts and Mr Berlusconi’s inability to resolve the situation, Italy faces severe pressure from the financial markets to have a new government before markets open.
But even if Mr Monti is summoned to form a government today, he would still have to assemble a cabinet, present his rescue strategy to Parliament and then seek a confidence vote after a debate. All that could take several days.
Whoever leads Italy faces a monumental task: an Italian default could tear apart the coalition of 17 countries that use the euro and wallop the economies of Europe and the US, which are trying to avoid new recessions.
In addition, the Italian economy – the third largest in the 17-nation eurozone after Germany and France – is considered too big for Europe to bail out like it did Ireland, Greece and Portugal. It totals €1.45 trillion, more than twice as much as the other three bailout countries combined.
The next Italian government needs to push through even more painful reforms and austerity measures to deal with Italy’s staggering debts, which stand at €1.9 trillion, or a huge 120% of economic output. In addition, Italy has to roll over more than €300bn of its debts next year alone.
Most centrists and centre-left parties in the opposition have pledged support 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 reforms of its economy.
But Umberto Bossi said his Northern League party won’t back any Monti-led government “for now”.
Mr Bossi said he told Mr Napolitano that his party, whose support kept Mr Berlusconi’s conservative coalition in power in three governments, will be a “vigilant” opposition to any Monti government until the economist spells out how he plans to rescue Italy’s troubled economy.
“For now, we said, ’no.’ Then we’ll see the programme and decide, time by time” whether to support specific legislation, Mr Bossi said. “In any case, we won’t give him any blank check.”
Mr 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
Centrist opposition leader Pier Ferdinando Casini, meanwhile, called on fellow political leaders to close ranks behind Mr Monti.
“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,” Mr Casini said, expressing hope that a new government could last until elections are scheduled for spring 2013.
Roberto Maroni, a founder of the Northern League, said he personally esteems Mr Monti but won’t back him politically.
“Parliament must have the guarantee of an opposition,” Mr Maroni told Italy’s Sky TG24 TV. “Otherwise it won’t be a democratic parliament.”
Pressured for days by the markets, which lost faith in the once charismatic Mr Berlusconi, the 75-year-old media mogul stepped down last night after anti-crisis measures won final approval in Parliament. He slipped out of the presidential palace through a side door after handing Mr Napolitano his resignation, as a hecklers jeered in the square outside the main entrance.
Mr Maroni said he spoke with Mr Berlusconi last night and found him “very tried, physically tired. But he is always a great fighter.”
“It was an ugly show to see. People spitting, throwing” objects, Mr Maroni said of the hecklers.
“This phase is over, a blank page is being opened,” Mr Maroni said, holding out hope that the League and Mr Berlusconi’s forces might again join in a future political coalition.
Several leaders in Mr Berlusconi’s own conservative party have said they either want the outgoing premier’s political heir, Angelino Alfano, or a veteran politician like former premier Lamberto Dini in power. Others in Mr Berlusconi’s party are demanding elections now.
Mr Berlusconi’s long-time nemesis, former anti-corruption prosecutor Antonio Di Pietro, said his small Italy of Values Party would be willing to back a strictly “technocrat” government with no politicians in the cabinet “to respond to the (economic) emergency and give back this country its credibility.”
Without mentioning Mr Monti by name, Mr Di Pietro insisted that elections must be held as soon as possible. But, he acknowledged, “in these hours of emergency, it’s very hard” to carry out an electoral campaign.
Mr Monti was reserved as he and his wife headed to church in Rome. Asked whether he was excited at the prospect of being Italy’s next premier, he responded: “Have you noticed what a beautiful day it is?”
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.
The austerity measures passed on Friday night will still not be enough to revive the dormant Italian economy. They raise the retirement age to 67, but not until 2026. They call for the sale of state property and privatising some services but contain no painful labour reforms.