Italian PM ready to announce new government

Mario Monti, senator and the prime minister designate (AP)

Mario Monti's race to have an emergency government in place by the weekend appeared assured of success yesterday when Silvio Berlusconi's anointed political heir said that parliament's biggest grouping, the People of Freedom party (PDL), was behind him.

Angelino Alfano, the secretary of the PDL, said after an hour-long meeting with Prime Minister-designate Mr Monti, pictured: "We think, in the light of events, that Professor Monti's bid to form a government will pan out."

A sticking point appeared to be to Mr Monti's efforts to coax his choice of centre-left Democratic Party and centre-right PDL politicians to work together in a technocratic cabinet. But, last night, Mr Monti was said to be ready to announce his ministerial line up.

But another bleak day on the money markets, with shares falling and Italian borrowing costs surging once again, suggested that investors want to see action not words – and that Mr Monti was in a race against time to start wielding the scalpel on Italy's sclerotic economy. The yield on Italian 10-year bonds passed the 7 per cent mark – a level that would in a short time bankrupt Italy, and probably cause the break-up of the eurozone.

"For Italy, it's the moment of truth," said the EU President Herman Van Rompuy, in a speech in Brussels in which he lauded his former colleague's credentials for dragging Italy out of the debt-confidence mire.

Reports suggest that Mr Monti has already prepared a programme focusing on austerity while boosting growth and job prospects, particularly for young people. EU officials have indicated that they expect the new government's reforms to go beyond those passed this month by the Italian parliament.