Italy's Monti faces pressure to run in election

[Inahime]

Italy's Monti faces pressure to run in election

By Steve Scherer and Giselda Vagnoni
ROME | Thu Dec 13, 2012 9:13pm EST

(Reuters) - Italian Prime Minister Mario Monti faced increasing pressure on Thursday to stand as a candidate in next year's election after Silvio Berlusconi's surprise offer to drop his bid for a fifth term as premier.

At a meeting of the European People's Party in Brussels, an umbrella group of centre-right parties, Berlusconi repeated the offer to stand aside if Monti agreed to run against the centre-left, who are tipped to win the election.

Monti's attendance at the meeting alongside Berlusconi and German Chancellor Angela Merkel came as a surprise to many as he was not on the guest list or agenda.

Monti was brought in a year ago to head a technocrat government to save Italy from financial crisis, but opinion polls suggest he would have little chance of winning an election if he were to run as a candidate.

He would also face many hurdles within the center-right, which is highly fragmented and includes his most entrenched critic, the Northern League.

"There were a lot of expressions of support for a Monti candidacy," a member of the European parliament told Reuters. "But Monti didn't resolve the dilemma."

Berlusconi center-right People of Freedom (PD) party withdrew support from Mont's government in parliament last week, prompting him to resign.

On Saturday, Berlusconi declared he would lead the PD into an election expected early next year.

With memories fresh of the financial crisis which prompted the end of Berlusconi government last year, his mooted return to frontline politics alarmed Italy's European partners and rattled financial markets.

The media magnate's call for Monti to stand has aroused skepticism in Italy because it came only two days after he had blamed Italy's deep recession on austerity policies he said had been dictated to Monti by Germany and the European Central Bank.

Opinion polls suggest Berlusconi has no real chance of winning the election, and markets have calmed. In an auction of three-year bonds on Thursday the Treasury paid the lowest borrowing costs since late 2010.

Monti is widely credited with restoring Italy's international credibility after the scandal-plagued Berlusconi era and he has given no clear indication of his intentions.

He has said only that he would like to continue playing a role in influencing ideas.

Asked about Berlusconi's offer ahead of a European Union summit in Brussels, Monti said it was neither the time nor place to respond. He said he was committed to leading the government in the brief time remaining before the 2013 budget is approved and he resigns - probably before Christmas.

BERATING SEEN WINNING

Berlusconi latest volte-face increases the likelihood that he will pull out of the election. He has been struggling to hold his People of Freedom party (PD) together.

Opinion polls, meanwhile, show a commanding lead for the center-left Democratic Party and its leader Pier Luigi Bersani, said Roberto D'Alimonte, a politics professor at Rome's Luis university and an expert on electoral systems.

"The only certainty about the upcoming election is that Bersani is going to win hands down," D'Alimonte said.

Bersani has supported the technocrat government in parliament but has been cool on the idea of Monti running at the election, saying to do so would put at risk his position as a universally respected independent.

It could also prevent Monti from becoming president of the Republic, a position which would give him considerable influence over the government and the political scene in general.

On Thursday, Bersani repeated that he expected the former European Commissioner to continue playing some role when his term in office ends.

"The day after the elections, the first person who I would like to have a conversation with is Monti," Bersani said.

Ferrari's chairman, Luca Cordero di Montezemolo, whose recently formed centrist group has been regarded as a potential vehicle for a Monti candidacy, said on Thursday he hoped he would throw his hat into the ring.

"I'm optimistic. I think Monti is the first to realize how much there is left to do," he told RAI state television.

Berlusconi's hopes have faded of securing an alliance with the regionalist Northern League party that could have given him a strong position in the Senate.

(Additional reporting By Luke Baker in Brussels; Writing by James Mackenzie; Editing by Myra MacDonald)

 

[Inahime]

Italian election campaign won't change economic outlook: finance minister

By Edward Krudy
NEW YORK | Thu Dec 13, 2012 9:13pm EST

(Reuters) - Italy's election campaign will not change the country's economic outlook, but any future government will need to deepen the present government's reform agenda, Italy's economy and finance minister, Vittorio Grilli, said on Thursday.

Grilli's comments in New York were aimed at reassuring markets that were ruffled this week when the Prime Minister Mario Monti said he would resign after his technocrat government passes its 2013 budget, expected before Christmas.

His decision, which followed an announcement by his discredited predecessor Silvio Berlusconi that he planned to run for office again, upset financial markets and pushed up Italy's borrowing costs.

General elections are now expected in February, a few weeks earlier than was originally planned.

"I understand elections are times of uncertainties, but I don't see any substantial fact that can arise from the electoral campaign that would change the fundamentals of the Italian economy," Grilli said at the Council on Foreign Relations.

Italy, the euro zone's third-biggest economy, has embarked on a tough austerity path that has helped it regain investor confidence and keep borrowing costs in check.

But the wobble in markets this week, although a far cry from the crisis of confidence that helped bring about Berlusconi's ouster late last year, is a reminder that Italy cannot take investor confidence for granted.

Austerity measures introduced by Monti's interim government to cut debt and rein in the deficit have included tax increases, spending cuts and pension reform, and have taken their toll on consumers and businesses.

Grilli has said the Italian economy should begin to recover from a painful recession in the second half of 2013. Italy fell into recession in the middle of last year.

The EU expects the Italian economy to shrink 2.3 percent this year and 0.5 percent in 2013 before it returns to meager growth of 0.8 percent in 2014.

(Reporting By Edward Krudy; Editing by Leslie Adler and Mohammad Zargham)