President appoints economist to lead Italy into early elections
● Technocrat to head interim government as markets fret
economist has been tasked with leading Italy to early elections after populist parties failed to convince the president their cabinet picks would not destroy international investors’ faith in the country.
A former International Monetary Fund official and specialist in budget-slashing, Carlo Cottarelli told reporters at the presidential Quirinal Palace that he had accepted president Sergio Mattarella’s request to form a government “that will bring the country to new elections”.
Inconclusive 4 March elections had left the country with what has proved to be an intractable political impasse. Markets have begun to take fright, with bond markets suggesting investors are becoming more cautious about lending to Italy.
Mr Cottarelli expressed hope his appointment could calm the markets.
“In the last few days, tensions have increased in the financial markets,” the premier-designate said.
“In any case, the Italian economy is growing, and the public accounts remain under control. A government led by me would assure prudent management of our public accounts.”
However, with the prospect of anti-euro political sentiment suddenly gaining traction in Italy, and another election approaching, markets remained on edge yesterday.
The government’s benchmark borrowing rate increased further, a sign of caution, even after Mr Cotan tarelli’s appointment was announced.
The ten-year rate hit 2.6 per cent yesterday, up sharply from 1.7 per cent last month.
That is still very manageable for the government, however, and well below the 7 per cent that forced a change of government in 2011.
Weeks ago, Mr Mattarella had told the nation that if Itain ly’s squabbling parties failed to join forces for Italians’ common good and forge a viable coalition, he would ask a technocrat – an expert not directly affiliated to political parties – to take the country to elections by the end of the year.
That is what ultimately happened after Mr Mattarella on Sunday night refused to approve the populists’ choice of an economy minister who has raised the spectre of Italy having to at some point exit from the euro.
The Five Star Movement and the League, the parties who were thwarted in their bid to give Italy its first populist government, have vowed to give Mr Cottarelli the thumbs down in required confidence votes in parliament.
A government led by Mr Cottarelli “is born dead”, said Five Star proponent Manlio Di Stefano. “It makes no sense to speak about it in a serious way,” he said.
his brief remarks, Mr Cottarelli made plain he knew any government of fellow technocrats he assembles might not be approved by parliament.
“In case of failing to win the confidence votes, the government would immediately resign, and its task would be that of routine administration until elections after the month of August,” he said.
Mr Cottarelli said that should his proposed cabinet be confirmed in parliament, he would set to work to ensure the country’s official budget is approved by MPS.
The budget law must be approved by December.
After that, Mr Mattarella would dissolve parliament and set elections for 2019, Mr Cottarelli said.
Mr Mattarella’s veto enraged League leader Matteo Salvini and the Five Star Movement’s Luigi Di Maio, who threatened to start impeachment proceedings against him.