ROME: Italian Prime Minister Mario Monti announced 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.
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.