Italy will today embark on a controversial 18-month gamble to turn around its finances and rescue the euro by handing over control to an administration of entirely unelected technocrats with strong links to Brussels and international finance.
The parliament is expected to vote in the government of Prime Minister Mario Monti, a former EU competition commissioner, together with his cabinet, which, it was revealed yesterday, contains not a single elected politician.
After being asked to form a government by the President Giorgio Napolitano, following the collapse of Silvio Berlusconi's discredited administration, it was believed Mr Monti might recruit some established politicians.
When asked yesterday why his cabinet contained no parliamentary figures, Mr Monti said his talks with party leaders suggested "the non-presence of politicians in the government would help it". Paolo Ferrero, leader of the far-left Rifondazione Comunista party, said: "This government with ties to banks, to business, to the Vatican, to private universities – to the usual names – is the opposite of what this country needs."
But Roberto D'Alimonte, a political science professor at Rome's LUISS University, approved the cabinet line-up. "All these people are very high-calibre and highly respected," he said.
Much of the Italian public appeared to accept that exceptional measures were necessary, with the mainstream political parties tacitly admitting they would not be able to carry the required reforms through parliament. A poll by IPR Marketing showed that 53 per cent back the Monti administration. Many pundits were of the view that a Monti-led administration offered Italy its best chance of restoring confidence.
The European Central Bank intervened in the crisis yesterday by ramping up purchases of Italian bonds. But the markets remained unconvinced and after some initial respite the all-important yields on 10-year government bonds edged back near 7 per cent yesterday afternoon, suggesting growing concerns that the Monti government will default.
Meanwhile in Greece, a new coalition government won a confidence vote in parliament easily, backing a pledge by Prime Minister Lucas Papademos to speed up long-term reforms and secure a new bailout deal.