Mario Monti, the former European Commissioner, emerged as favorite to replace Silvio Berlusconi and form a new government to stave off a run on Italian bonds that is endangering the entire euro zone.
A highly respected international figure, Monti, has been pushed by markets for weeks as the most suitable figure for leading a national unity government that will urgently push through painful austerity measures.
In a key development on Thursday, Berlusconi’s ruling PDL party softened its insistence on early elections as the way out of a deep political crisis and said it was considering the option of a Monti-led government.
President Giorgio Napolitano appointed Monti a senator for life on Wednesday, in a move widely seen as a sign he would ask the academic to try to form a broad-based government as soon as Berlusconi goes within the next few days.
With Italy’s borrowing costs now clearly deep in the danger zone, support for a national unity government appeared to be gaining support among members of the PDL with Foreign Minister Franco Frattini indicating cautious support.
“The PDL can’t just follow the cry for elections from the hard core in support of going to the polls. There’s a national interest, which comes before anything,” he said in an interview with the Corriere della Sera daily.
Tags: austerity measures, borrowing costs, euro zone, political crisis