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
    +4

    Comment number 78.

    Where were these 'experts' in the first place?

  • rate this
    0

    Comment number 77.

    It's the same story if you are an individual or a country - if you live beyond your means, you eventually lose control of your destiny.

  • rate this
    -1

    Comment number 76.

    I watch the idea of having a Governmant made up of people who actually know what they are talking about with great interest.

    We should try it here! Our system allows a Minister to be in charge of Transport one minute, Defence the next, while probably knowing little about either of them.
    Thus successive Governments here clearly have no idea about how to manage money, only how to waste it.

  • rate this
    -1

    Comment number 75.

    Will definitetly give them a chance, Academics and professionals who have talked for years getting to run the asylum, why not, can they do worse.
    Not politicians and not dependent on patronage or the peoples whims but some not used to dealing with civil organisations or the scrutiny of the media and can they bring the people with them along this dificult road.
    Interesting times.

  • rate this
    +1

    Comment number 74.

    "Monti unveils technocratic cabinet for Italy"

    What were they veiled with? Dust sheers?

  • rate this
    0

    Comment number 73.

    Unelected European Coup of Dictatorship

  • rate this
    -2

    Comment number 72.

    Never thought I would see so many excuses made for the lack of a democratic mandate for the leader of a European nation, I suppose thats fine, I just have a problem with said countries preaching to other coutries about the virtues of democracy, China for example also is an unelected government full of technocrats, and it works quite nicely for them so maybe we're on to something

  • rate this
    0

    Comment number 71.

    Colomboegg

    So what. People resign all the time for reasons other than confidence votes. It's not like Berlusconi was universally loved. In reality he had been in trouble in Italy for a while. If the ruling party didn't like Conti they could have walked out or blocked his appointment. But that would have signaled instability.

  • rate this
    +2

    Comment number 70.

    With all these cabinet members with financial backgrounds, has he appointed a minister for bonuses yet?

  • rate this
    -1

    Comment number 69.

    I suppose Mr Monti taking on the finance and economic portfolio himself shows that he is willing to stake his reputation and political future on the success of those policies. Wish there were more like him.

  • 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
    0

    Comment number 67.

    A technocratic cabinet is what we have in place in Portugal. Ministers of Economy and Finance are not politicians. We still don't know if they will bend towards the politicians' needs or towards a social point of view when proceeding with legislation to cut the debt. Markets are still in doubt, and we still need them to cut rates!

  • rate this
    0

    Comment number 66.

    I don't see any Eurozone members willingly dropping out, especially France, Germany or the Netherlands. They've gone too far to back out. A greater fear is that they will create an EU within the EU. That's what is being floated now. By the way, the paranoia represented in some of these posts can only be treated with medication.

  • rate this
    0

    Comment number 65.

    64. fedp

    "Berlusconi government don't have received any not confidence vote by parliament". THIS IS A FACT.
    "Berlusconi resign only for the market pressure" THIS IS A FACT.
    "The (new) PM was chosen with a gun at the head". this is my (legitimate) opinion..

    no one speculation in my comment

  • rate this
    -1

    Comment number 64.

    62. Colomboegg
    It is a legitimate prerogative of the PM to resign, whatever the reason might be. But still, the PM is not elected. For Italian constitution a PM operates under the mandate of the President. A government gets its democratic legitimation from elected PMs.
    As long as this is not violated - and it has not been violated - your speculations are not founded.

  • rate this
    0

    Comment number 63.

    This is the thing that we need. It must have been made a year ago...It could be too late now...I hate the politicians because they have any kind of privilege.It is remarkable that we have more " blue-car" than every country in the world.In these days have decreased the number of these cars but have increased their wages.This is just one.Politicians damage the country.

  • rate this
    0

    Comment number 62.

    57. fedp
    Berlusconi government don't have received any not confidence vote by parliament. For the italian constitution Berlusconi government is still the legitimate one.
    Berlusconi resign only for the market pressure (read bankers) and now at government there are bankers...
    The PM was chosen with a gun at the head..this is not democracy

  • 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
    +1

    Comment number 60.

    28.david - not really, no. As it stands I am forced now to purchase a substandard Parmesan substitute, which of course is not allowed to be called Parmesan due to EU rules requiring Parmesan to come from Parma. Having said that no-one has stopped the Czechs from having something called "English Fat" which is meant to be bacon, but isn't. Which kind of ruins a good carbonara - no bacon or Parmesan.

  • rate this
    -1

    Comment number 59.

    Don't expect much from this Mario Monti as he keeps Italy in the Eurozone and continues to use the Euro instead of going back to the Lire. The idea of the Eurozone is a bad one to begin with and Italy would do quite well to pull out of it as well as Germany. The problem is, is that the current European are too bull-headed to do it!

 

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