New Italian PM Mario Monti's government of technocrats passed its first test, winning a vote of confidence in the senate late Thursday. As expected, the government won the vote in the upper house of parliament easily, by 281 votes to 25.
Mario Monti formed a new technocrat government in Italy Wednesday to tackle a major debt crisis threatening the entire Euro zone and said he hoped it would placate financial markets.
Italy's Prime Minister-designate Mario Monti said on Monday his first day of talks for a new government were constructive and he hoped to form an administration that could take the country through to the next scheduled elections in 2013.
As technocrats leaders in Italy and Greece rush to form governments as they sought to limit the damage from the Euro zone debt crisis – and the Euro climbed on relief that a key Italian bond auction drew decent demand from investors – German chancellor Angela Merkel stepped up to defend Europe’s common currency.
Mario Monti is starting work to form a new government to lead Italy out of its acute debt crisis which prompted the resignation of Silvio Berlusconi. The appointment of Mr Monti, an ex-EU commissioner, was announced by Italy's president on Sunday.
Stock markets in Asia opened sharply lower on Thursday after Italy's record-high cost of borrowing renewed fears over the Euro-zone crisis. Japan's Nikkei index fell 2.3%, Australia's ASX was down 2.8% while South Korea's Kospi opened 2.6% lower.
Italian Prime Minister Silvio Berlusconi said on Tuesday he would resign after suffering a humiliating setback in parliament that showed a party revolt had stripped him of a majority.
Italy's cabinet failed on Tuesday to agree on pension reforms as the country seeks to re-launch its economy and tackle its debt. Meanwhile, financial markets nervously await the outcome of Wednesday's second Euro zone summit.
Fitch cut on Friday Italy's sovereign credit rating by one notch and Spain's by two, citing a worsening of the Euro zone debt crisis and a risk of fiscal slippage in both countries. Fitch cut Italy's rating to A+ from AA- and lowered Spain to AA- from AA+.
The International Monetary Fund could buy Spanish or Italian bonds alongside the Euro zone bailout fund if needed, to help boost investor confidence in those countries, the IMF Europe head Antonio Borges said on Wednesday.