Italian Prime Minister designate Mario Monti vowed to unveil a new government today that will be able to overcome the debt crisis, as bond rates hit dangerous highs and Europe held its breath.
The former Eurocrat is scheduled to meet with President Giorgio Napolitano at 10.00 GMT before he is officially sworn in, Italian media reported.
There will then be a handover of power ceremony with Mr Berlusconi.
Mr Monti spent Monday and yesterday locked with political leaders, trade unionists and business associations, as well as representatives of women’s and youth groups to try and build a consensus behind painful reforms.
At the close of the negotiations, the 68-year-old economist said he was “absolutely convinced in the ability of our country to overcome such a difficult period” and would unveil his new government “within hours”.
The ex-commissioner – who famously won cases against US giants Microsoft and General Electric – has warned that Italians face “sacrifices” ahead but has also said he will struggle for “social equity” and “a true civil society”.
“Monti is our last chance to become credible again,” Emma Marcegaglia, head of the main employers’ group Confindustria, said after meeting him yesterday.
Raffaele Bonanni, leader of the CISL trade union, said: “Monti told us that he has reached a deal with the main political forces.”
But La Repubblica daily said Mr Monti was “concerned his government may find itself without political sponsors and last only a few months”.
Mr Monti has said he wants his Cabinet to stay on until 2013 – the scheduled date for Italy’s next elections.
Investors meanwhile piled the pressure on Mr Monti with stocks in Milan closing down 1.08 per cent and Italy’s borrowing costs breaking through a seven per cent threshold that has set off alarm bells around Europe and beyond.
Mr Monti has asked for investors to be patient after intense international lobbying for him to forge a cabinet and move urgently to tackle Italy’s worryingly high €1.9 trillion debt.
Analysts said the new leaders of Italy and Greece had to act fast.
“While the new governments led by reform-minded economists are seen as a good starting point for the reform process, implementation will at best take time,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.
Lee Hardman at The Bank of Tokyo-Mitsubishi UFJ in London, said: “The market will need to be convinced.”
The worst performer on the Milan exchange was aerospace and defence giant Finmeccanica, which plummeted 20.33 per cent after the company unveiled a net loss of €324 million for the first nine months of the year.
That came a day after Italy’s biggest bank UniCredit announced it had suffered a €10.64 billion loss in the third quarter and would cut 5,200 jobs by 2015 in a sign the country is far from shaking off the crisis.