- Associated Press - Wednesday, November 16, 2011

ROME — Prime Minister Mario Monti formed a new Italian government without a single politician Wednesday, drawing from the ranks of bankers, diplomats and business executives to create a team to steer Italy away from financial disaster.

The 68-year-old former European Union competition commissioner told reporters he will serve as Italy’s economy minister as well as its premier as he seeks “sacrifices” from across the political spectrum to solve the economy’s woes and get it growing again.

Mr. Monti and his new Cabinet ministers were sworn in at the presidential palace, formally ending Silvio Berlusconi’s 3 1/2-year-old government and the media mogul’s 17-year-long political dominance.

Mr. Monti said he will lay out his emergency plan Thursday in the Senate before a confidence vote. A second vote, in the lower Chamber of Deputies, will follow, likely on Friday. He stressed that economic growth is a top priority.


Hopes for his new administration won Italy some respite in financial markets Wednesday. The yield on its 10-year bonds dropped 0.16 percentage points to 6.77 percent.

In the last week, that borrowing rate had flirted over 7 percent - 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 debt of $2.6 trillion, nearly 120 percent of its GDP.

But after Mr. Berlusconi’s frequent delays and backtracking on austerity and reform measures, markets lost faith that his government could fix Italy’s economic issues.

Restoring confidence is crucial because, as the third-largest economy in the eurozone, Italy is too big for Europe to rescue. A debt default by Italy could break up the eurozone and shake the global economy.

Mr. Monti gave few hints about his political program Wednesday.

Explaining why his Cabinet had no one from Italy’s fractious political parties, Mr. Monti said he decided after talks with party leaders “that the non-presence of politicians in the government would help it.”

Mr. Monti’s ministers include:

• Corrado Passera, CEO of Italy’s second-largest bank, Intesa Sanpaolo SpA, as minister of economic development and infrastructure.

• Piero Gnudi, a longtime chairman of Enel utility company, as tourism and sport minister in a country heavily dependent on tourist revenue.

• Giulio Terzi di Sant’Agata, the current Italian ambassador to Washington, as foreign minister.

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