In with the new

Italian President Giorgio Napolitano on Sunday nominated ex-European commissioner Mario Monti to form a new government, a day after Silvio Berlusconi quit after dominating politics for nearly two decades.

"In a moment of particular difficulty, Italy must win the challenge to bounce back and must be increasingly an element of strength, not weakness, in a European Union that we helped found," Monti told reporters after being given the mandate.

The 68-year-old economics professor and dean of the prestigious Bocconi University in Milan has never held political office in Italy, but he earned the reputation as a fearless politician during his tenure in Brussels.

The European Union welcomed the signal from Italy towards a government of national unity, saying the selection of Monti sent a sign of resolve to overcome the financial crisis.

"We believe that it sends a further encouraging signal, following the swift adoption of the 2012 Stability Law, of the Italian authorities' determination to overcome the current crisis," Jose Manuel Barroso and Herman von Rompuy, the heads of the European Commission and European Council, respectively, said in a statement.

Much at stake

Monti faces a monumental task: an Italian default could tear apart the coalition of 17 countries that use the euro and wallop Europe and the US, which are trying to avoid 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 interim government needs to push through even more painful reforms and austerity measures to deal with 1.9 trillion euros ($2.6 trillion) in debt - 120 percent of the country's economic output.

Most centrists and center-left parties in the opposition had 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 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.

Northern league opposition

Earlier, Umberto Bossi said his Northern League party wouldn'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, would 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."

Roberto Maroni, one of the founders of the Northern League, echoed Bossi's refusal to back Monti.

"Parliament must have the guarantee of an opposition," Bossi said on Italy's SKY TV channel.

"Otherwise it won't be a democratic parliament."

Author: Gabriel Borrud (AFP, AP)
Editor: Andreas Illmer