ROME (Reuters) - Italian Prime Minister Mario Monti
announced on Saturday that he would resign once the 2013 budget is
approved, potentially bringing forward an election due early next year
and fuelling speculation that he might run.
The surprise announcement came two days after Silvio Berlusconi's
party withdrew parliamentary support for the technocrat government and
hours after Berlusconi said he would run to become premier for a fifth
time on a platform that attacks Monti's stewardship of the economy.
Parliament is
already poised to pass the budget by Christmas, and so Monti's
resignation probably brings the expected vote forward by no more than a
month to February. Elections must follow no more than 70 days after President Giorgio Napolitano dissolves parliament.
Monti's move turns
the tables on Berlusconi, who seemed to have once again seized a
political opportunity to keep his party in the political game just a
year after being forced to resign amid a sex scandal and a debt crisis.
Berlusconi could
now be forced into an election earlier than he expected with his badly
divided party trailing in opinion polls behind the centre-left and the
anti-establishment 5-Star Movement of the comic Beppe Grillo.
Monti's announcement will also increase speculation that he could be eyeing a run as a candidate in the election himself although he has yet to make any clear statement.
At a conference in France earlier, Monti, a former European commissioner who is widely credited with restoring Italy's
international credibility after the scandal-plagued Berlusconi era,
appeared to take aim at Berlusconi, warning against "populism".
He said Italy should not go back to where it was when he took over for Berlusconi a year ago.Following a two-hour meeting with Napolitano, he warned that not approving the budget "would render more serious the government crisis, also at a European level," and said that after it is approved, his resignation would be "irrevocable".
Leaders of both Berlusconi's centre-right People of Freedom (PDL)
party and the centre-left Democratic Party (PD), which is leading in
the opinion polls, said they were willing to accelerate the passage of
the budget.
"Faced with the irresponsibility of the right that
betrayed a commitment it made a year ago before the whole country...
Monti responded with an act of dignity that we profoundly respect," said
PD leader Pier Luigi Bersani.
"We are ready to approve the budget in the fastest possible manner," he said in a statement.
"RECESSIVE SPIRAL"
Italians will vote
in the middle of a severe economic crisis, with a recession that began
mid-way through last year showing no signs of abating, a massive public
debt and unemployment at 11.1 percent, a record high.
With the support of a cross-party alliance including
both the PD and the PDL, Monti imposed tax hikes and spending cuts to
bring borrowing costs under control and undertook a series of reforms to
improve the competitiveness of the economy.
But Berlusconi said
on Wednesday that the former economics professor's austerity policies
had left Italy facing a "recessive spiral without end".
The PDL withdrew parliamentary support for Monti on
Thursday, driving up the difference between German and Italian benchmark
bonds by about 30 basis points.
"On Monday morning
the markets will judge this latest outburst by Berlusconi and they
certainly will not judge it positively," PD vice president Enrico Letta
commented. Letta added that elections now were likely in February.
Berlusconi's
centre-right PDL lags the PD by at least 16 percentage points in opinion
polls, and also trails the anti-establishment 5-Star Movement, which
has surged to prominence on a tide of public anger against the
mainstream political class.
Monti's move will fuel speculation over whether he
intends to run to lead the country next year once he has resigned. So
far he has said he will step in only if the election result is unclear,
but there has been growing speculation he could join forces with a
centrist group.
Financial markets
have been closely watching the political upheaval in Italy and many in
the business establishment have hoped for a second term from Monti.
However Berlusconi, Italy's most proved election campaigner, said that he would not give in easily.
"I race to win," Berlusconi told reporters at the practice field for AC Milan, the soccer club he controls.
"To win, everyone said there had to be a tested leader.
It's not that we did not look for one. We did, and how! But there isn't
one... I'm doing it out of a sense of responsibility."
The media magnate
has ample resources to back his bid - the country's biggest television
network, its biggest magazine publisher and a family-owned newspaper.
Echoing comments by the leader of the 5-Star Movement,
Beppe Grillo, Berlusconi criticized the single currency earlier this
year and has slammed Germany's influence on European policy.
In his blog, Grillo
said Berlusconi is running for office because he knows the average
Italian "is literally terrified about the prospects of five more years
of Monti-like rule".
Italy PM Monti says he will resign when budget passed
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Italy PM Monti says he will resign when budget passed
