Economist Mario Monti formed a new Italian cabinet without a single politician Wednesday, drawing from the ranks of bankers, diplomats and business executives to make sure Italy escapes looming financial disaster.
The 68-year-old former European Union competition commissioner told reporters he will serve as Italy's economy minister as well as premier for now as he seeks to implement "sacrifices" to heal the country's finances and set the economy growing again.
Monti and his new cabinet ministers were sworn in Wednesday, formally ending Silvio Berlusconi's 3 1/2-year-old government as well as his 17-year-long run of political dominance.
Berlusconi and Monti later shared a handshake in an unofficial handover of power at the premier's office.
Monti said he would lay out his emergency anti-crisis policies in the Senate on Thursday, ahead of a confidence vote. A second vote, in the lower Chamber of Deputies, will follow, likely on Friday. He stressed that Italy's economic growth is a top priority.
Hopes for Italy's new administration won it some respite in financial markets Wednesday. The yield on its ten-year bonds dropped 0.16 percentage point to 6.77 per cent. In the last week, that borrowing rate had flirted over 7 per cent — the level that forced fellow eurozone members Greece, Ireland and Portugal to seek international bailouts.
Up until summer, Italy had mostly avoided the European debt turmoil despite having a jaw-dropping amount of debt: €1.9 trillion ($2.6 trillion), or is nearly 120 per cent of its GDP. But after frequent delays and backtracking on austerity measures, markets lost faith that any Berlusconi government could fix Italy's economic issues.
Restoring confidence in Italy's financial future is crucial because, as the third-largest economy in the eurozone, it is too big for Europe to rescue. A debt default by Italy would threaten the euro itself and shake the global economy.
Few hints on policy
Monti gave few hints about his political program Wednesday, sidestepping a question about whether the government would dip into citizens' bank accounts as it did decades ago during another debt crisis.
"You may ask," he replied, but went no further.
Explaining why his Cabinet contained no one from Italy's fractious political parties, Monti said that his talks with party leaders led him to the conclusion "that the non-presence of politicians in the government would help it."
His ministers include Corrado Passera, CEO of Italy's second-largest bank, Intesa Sanpaolo SpA, to head Development and Infrastructure; Piero Gnudi, a longtime chairman of Enel utility company, as Tourism and Sport minister in a country heavily dependent on tourist revenues; and the current Italian ambassador to Washington, Giulio Terzi di Sant'Agata, to be foreign minister.
A historian of the Catholic church with close ties to the Vatican, Andrea Riccardi, was named minister of international and domestic co-operation, a choice that seemed to reward pro-Vatican lawmakers in Parliament.
Still, his choices raised some eyebrows.
"This government, ties to banks, to business, to the Vatican, to private universities — to the usual names — is the opposite of what this country needs," said Paolo Ferrero, leader of Rifondazione Comunista, a tiny, far-left party.
Passera also sits on the board of directors of Milan's Bocconi University, which forms Italy's business elite. Monti is currently the head of the Bocconi.
Given top marks
But analysts gave Monti's selections a top mark, insisting the cabinet ministers were independent.
"I think the quality of the people is very high," said Roberto D'Alimonte, a political science professor at Rome's LUISS University. "All these people are very high-calibre, and highly respected, independent."
Monti says Italy can beat the crisis if its largely polarized citizenry — often bitterly divided over Berlusconi's long tenure — can pull together. He has also met with union leaders and business representatives.
"I hope that, governing well, we can make a contribution to the calming and the cohesion of the political forces," Monti told reporters.