Italy is on the brink of descending into political uncertainty once more after current Prime Minister Mario Monti announced that he wants to resign and former leader Silvio Berlusconi prepares to stand in the upcoming elections.
Monti’s decision to resign has shocked the country but has paved the way open for Berlusconi to launch a new assault on the top job. Monti’s technocratic government has struggled to see out its mandate and faces an uphill challenge to achieve its objectives thanks to opposition from the largest party in the parliament, the centre-right People of Liberty party. A party led by Mr Berlusconi.
Mr Monti became the leader of a technocrat government in 2011, replacing Berlusconi after investors became concerned that Italy was heading in the same direction as Greece. He came to power with the sole task of improving Italy’s finances and on the whole he has achieved that aim. When he first came to power Italian 10-year bond yields hit a record of 7.48%, now it stands at fewer than 5%.
As a result of his announcement shares have dropped right across Europe as economists and investors now worry that Berlusconi could take power once again.
A statement from the office of President Giorgio Napolitano over the weekend said that Mr Monti “does not think it possible to continue his mandate and consequently made clear his intention to present his resignation”.
If the law for next year’s budget can be passed “quickly”, Mr Monti would immediately confirm his resignation, the statement said. Under Italian law once Monti and his government resign an election must be held within 70 days. Such a move would bring the nations proposed April election forward by several weeks.
Berlusconi can be blamed for the current situation as it was under his direction that his party suddenly withdrew its support for Monti last Thursday, the same day that Berlusconi confirmed that he would lead the party into the next election. Mr Berlusconi was convicted of tax fraud in October, though he is appealing against that ruling, and he is also on trial accused of paying for sex with an underage prostitute. He has already served as Italy’s prime minister for three separate terms and built up what is believed to be a vast personal fortune from his business empire.
Berlusconi will face an uphill challenge if he wants to get re-elected as he is currently 20 points behind in the opinion polls. He has launched an anti-austerity, anti-German campaign in a bid to tap into the Italian people’s anger. Unfortunately for him it is very unlikely that the people will forgive him for his former misdemeanours.
While pro-Berlusconi newspapers rejoiced on Sunday at the news of Mr Monti’s impending resignation, mainstream dailies voiced deep concern.
“It should be time for Italy to become a normal country, predictable and even boring. A country not to be ashamed of that can sit in Europe and succeed in making itself heard,” wrote Mario Calabresi, editor of Turin’s La Stampa. “For a year we got close to it.”
The Pound to Euro exchange rate is currently trading at 1.2423
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