Italy’s Monti to Resign After Berlusconi Pulls Support

The technocrat warns that Italy could become “the detonator” that blows up the eurozone.

Italian prime minister Mario Monti addresses parliament in Rome, June 13
Italian prime minister Mario Monti addresses parliament in Rome, June 13 (Mario Sayadi)

Italy’s technocratic prime minister, Mario Monti, has said he will resign after a budget law was passed in parliament without the support of former prime minister Silvio Berlusconi’s conservatives.

Berlusconi announced on Friday he would stand in the next election, claiming to have been “besieged by requests” from right-wing party members.

“I cannot let my country fall into a recessive spiral without end,” he said. “It’s not possible to go on like this.”

Monti’s decision is likely to trigger parliamentary elections before his mandate expires in April, possibly as early as February of next year.

Berlusconi in a corner

Berlusconi’s Il Popolo della Libertà withdrew its support from Monti’s cabinet before the weekend, citing a collapse in home sales, economic contraction and rising taxes. Party leader Angelino Alfano singled out tepid labor market reforms which he claimed Monti had watered down under pressure from the left-wing Partito Democratico — which still does support his government — and the powerful trade unions.

Il Popolo della Libertà and the Partito Democratico, which between them command supermajorities in both chambers of parliament, have backed Monti’s reforms since Berlusconi was forced to resign last year at a time when Italy teetered on the brink of sovereign default.

Berlusconi was also embroiled in corruption and sex scandals. A law introduced by the Monti government last week would prohibit politicians who have been convicted of a crime by two separate courts from holding office. Under it, Berlusconi, who is facing three trials, would not be eligible to become prime minister again if he is convicted.

His party insists that the law was no reason for pulling its support, but the right has been hardest hit by recent corruption probes.

“Detonator”

In a pointed reference to Berlusconi’s previous administration, Monti warned on Saturday that Italy had to avoid becoming “the detonator that could blow up the eurozone” again.

The country is the third largest economy in Europe’s single currency union and its government the most heavily indebted after Greece’s. Italy’s public debt is equivalent to 126 percent of gross domestic product.

Berlusconi’s party is far behind in the polls. Recent surveys give it fewer seats than both the Partito Democratico and the Euroskeptic Five State Movement led by comic Beppe Grillo, giving left-wing leader Pier Luigi Bersani the best chance to claim the prime ministership.

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