Monti asked to form Italian government

Former European commissioner to lead government after Berlusconi’s resignation.

Mario Monti, a former European commissioner, has been asked to form a new Italian government, following the resignation of Silvio Berlusconi on Saturday.

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Monti, who is currently president of Bocconi University, was today summoned by President Giorgio Napolitano for talks on forming a new government to replace Berlusconi’s administration.

Berlusconi resigned after the lower house of parliament approved a package of measures designed to cut Italy’s debt by €60 billion and rebalance the country’s budget by 2014.

The measures, which were approved by the Senate on Friday, were demanded by Italy’s eurozone partners in order to restore confidence in the Italian government’s ability to cut its debt levels, the second highest in the eurozone after Greece.

A government led by Monti is expected to win the support of Berlusconi’s centre-right People of Freedom (PdL) party as well as the centre-left opposition. The Lega Nord has said it will not support a Monti-led government and is demanding new elections.

Negotiations on a new government are expected to be completed by Wednesday. The new government’s first priority will be to implement  the package of spending cuts and reforms.  

Pressure on Berlusconi to resign increased this week when yields on Italian government bonds reached record highs, reflecting a lack of confidence on financial markets that the government could push through difficult economic reforms.

Jose Manuel Barroso, the president of the European Commission, and Herman Van Rompuy, the president of the European Council, welcomed the decision to ask Monti to form a government of national unity, saying “it sends a further encouraging signal” after the Italian parliament approved the package of economic reforms.