Monti unveils technocratic cabinet for Italy

 

Mario Monti was sworn in as prime minister during a ceremony in Rome

Mario Monti has unveiled a new, technocratic cabinet meant to steer Italy through its debt crisis after the fall of Silvio Berlusconi's government.

Mr Monti, who has now been sworn in, appointed a banker to lead a super-ministry of development, infrastructure and transport.

Mr Monti, a former EU commissioner, has sought to reassure markets that Italy will overcome its debt crisis.

Italy's borrowing costs have fallen back below the critical 7% level.

The European Central Bank eased the pressure, pushing costs down by buying up Italian bonds.

No politicians

Analysis

The new Italian prime minister's decision not to include members of the country's current political ruling class in his cabinet of "technocrats" is the key to understanding his tactics in trying to restore credibility to the country in international financial markets.

There had been widespread speculation during Mario Monti's consultations with the former political leadership that he would appoint Gianni Letta, Silvio Berlusconi's right-hand man for many years, as cabinet secretary for reasons of continuity. But in the end Mr Letta and also Giuliano Amato, a former "technocrat" prime minister, were absent from his list of ministers.

After reading out his new cabinet list, Mr Monti spoke of the "lively" dialogue he had had with the leaders of major and minor political parties during the past 48 hours. This was code for his determination to establish himself as a political innovator who is not in thrall to the leadership of Silvio Berlusconi and his ministers, who were forced to resign as they were not up to the task of dealing with Italy's worst crisis since World War II.

Mr Monti took on the economy and finance portfolio himself.

Corrado Passera, CEO of the Intesa Sanpaolo banking group, was named to head the new ministry of development, infrastructure and transport.

Another key appointment was that of Antonio Catricala, head of the anti-trust authority, who was made under-secretary to the prime minister's office.

Despite reports that Mr Monti had sought to include politicians in his cabinet, there are none.

"The absence of political personalities in the government will help rather than hinder a solid base of support for the government in parliament and in the political parties because it will remove one ground for disagreement," he said.

Some analysts have said this lack of political cover may leave the administration open to being undermined in parliament.

Mr Monti still faces a confidence vote at the Senate on Thursday and at the lower house on Friday, but it looks certain that he will receive the backing of lawmakers, correspondents say.

Former Prime Minister Silvio Berlusconi has reportedly said he could "pull the plug" on the government if he does not like what it does.

Announcing his list, Mr Monti told reporters he aimed to restart economic growth in Italy.

He paid tribute to Mr Berlusconi, who resigned on Saturday, bowing to market pressure.

Monti's technocratic government

  • Mario Monti - Prime minister and economy minister. Former European Commissioner
  • Corrado Passera - Minister of development, infrastructure and transport. CEO of Italy's largest retail bank, Intesa Sanpaolo
  • Antonio Catricala - Cabinet undersecretary. Head of antitrust authority
  • Elsa Fornero - Labour minister. Economics professor, University of Turin. Expert on welfare and pensions
  • Giampaolo Di Paola - Defence minister. Navy admiral. Chairman of Nato Military Committee. Former Chief of Staff of Italian military

Mr Monti is tasked with reducing public debt of 1.9tn euros ($2.6tn; £1.6tn) and restoring economic growth.

Borrowing costs for the government have soared in recent weeks, to levels at which Ireland, Portugal and Greece needed emergency bailouts.

Italy's debt is large but is considered stable and its deficit is relatively low but Mr Berlusconi's failure to push through critical economic reforms led to a collapse of investor confidence.

"It will be a race," Mr Monti said after unveiling his cabinet. But, "we have had many signals of encouragement from our European partners and the international community.

"I believe all this will translate into... a calming of the market difficulties concerning our country," he said.

He has the backing of Italy's main political parties but still needs approval from both houses of parliament before he can take office and push through tough austerity measures.

Only one party, the right-wing Northern League, says it will withhold its support.

Mr Monti intends to remain in office until the end of the current legislature - 2013.

'Undeniable experience'

London-based economist Annalisa Piazza said the new cabinet seemed to contain a "good mix of specialties".

Start Quote

The only question for Italy is: 'Is it too late?'”

End Quote Riccardo Barbieri Chief European economist, Mizuho

"A majority of names are academics with undeniable experience in their respective sectors," she was quoted by Reuters news agency as saying.

"I think that the choice of Passera... is important considering the crisis originated in the financial sector."

The Newedge Strategy economist also singled out Piero Giarda, an expert on public finances, who was made minister for relations with parliament.

Another economist, Riccardo Barbieri of Mizuho, told Reuters: "The cabinet is made up partly of people Monti knows well and trusts and partly of people who have probably been suggested to him by President [Giorgio] Napolitano as being credible...

"It's interesting that Monti has kept the economy ministry for himself. He obviously wants to be in control of what is clearly the most critical area."

Welcoming the appointment of Mr Passera, the economist added: "The only question for Italy is: 'Is it too late?'"

 

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  • rate this
    +5

    Comment number 68.

    Here, in Italy, this new cabinet is very important. After the long and unbecoming Berlusconi's era, the country needs to be ruled (finally) with seriousness. All italians know the gravity of the moment, and how our country may be important for the world's financial balance.

  • rate this
    +5

    Comment number 61.

    These cabinet appointments are designed to reassure potential bond purchasers and current bond holders that the "adults" are in charge now. Look for interest rates to drop short term, but "action" (as perceived by the market) will be required from Monti to continue to receive favorable interest rates.

  • rate this
    +7

    Comment number 38.

    Pity so little enthusiasm for a new government made of serius academics experts in their field. They will try to do their best, for our Country, and let's hope they are serius in doing that and succeed.

  • rate this
    -4

    Comment number 37.

    In Italy and in Greece this will end in tears. Being directly ruled by an unelected and imposed leadership will soon become too much for the populations of these two countries.

  • rate this
    +9

    Comment number 34.

    All that can be said is, let's wait and see how this new cabinet does before passing judgement. On the other hand, doing something, anything other than partying would be an improvement so best of luck to them.

 

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