Italian President Giorgio Napolitano has appointed the former European Union (EU) Commissioner Mario Monti as head of the country’s caretaker government. The move follows the resignation of Silvio Berlusconi on Saturday.
“I would like to thank the president of the republic for his trust towards me,” said the new interim prime minister, adding that Italy needed to return to being a country of "strength rather than weakness in a European Union that we [Italy] helped to found."
“We need to give our children a concrete future... therefore I undertake this task with with a great sense of responsibility and service toward this nation,” said the 68-year-old academic who refused to be drawn on a timetable for the formation of the interim government, or who he planned to select as ministers.
Monti's appointment was rushed though following a series of meetings between Napolitano and senior politicians in the hope announcing the posting before markets opened on Monday morning.
Despite voicing reservations, members of Berlusconi's party eventually agreed to Monti's appointment following prolonged negotiations.
A distinguished liberal economist who will lead a technical rather than a political government, Monti is charged with overseeing a series of stringent austerity measures imposed by eurozone leaders in the hope of countering Italy’s growing debt crisis.
Prior to Monti's appointment, Berlusconi gave a bizarre recorded speech to Italian TV in which he trumpeted his past successes, as well as offering advice for the in-coming administration.
“I am convinced that only together we can win, only by setting aside our differences and only by working for the good of Italy," he said.
“My government carried out their duty... In record time we have set up the so-called stability bill, containing more than 50% of the measures requested by our European partners… showing that Italy is serious."
In response to the scenes of celebration following Berlusconi's departure, the clearly upset former prime minister said that he resigned "out of a sense of responsibility" and that it was "sad" that such a “responsible and generous gesture” was met with "booing and insults".
Speaking to those Italians that had not welcomed his departure, he said: “Thank you all for your affection and for the strength that you have transmitted to us [the party], allowing us to achieve many of the objectives that we set out for ourselves."
The dénouement was a declaration of his “love for Italy”.
The broadcast, which aired as Monti was entering the presidential palace, was criticised by several politicians, with one likening it to an address from the late Romanian dictator Nicolae Ceausescu.
Earlier on Sunday, Berlusconi posted a message on his Facebook page suggesting he might return to Italian politics.
On Saturday, members of the lower house voted 380-26 in favour of the austerity legislation.
Among the measures included in the finance bill is an increase in VAT from 20% to 21% and a freeze on public-sector salaries until 2014.
Berlusconi has said he would step down once the legislation was put in place and markets will be waiting to see how the transition is managed.
He met Italian president Giorgio Napolitano to hand in his notice after a final meeting of his cabinet. Italian news agency Ansa quoted
Berlusconi as telling aides: "This is something that deeply saddens me".
Demonstrators chanting "resign, resign, resign" had gathered outside parliament and it has been reported that Berlusconi's car was pelted with coins as it drove to the presidential palace.
News of his resignation was greeted with celebrations in central Rome.
It is expected that the former European Commissioner Mario Monti will head a technocratic cabinet to steer the country through its current turmoil.
Italy has come under immense pressure from investors as confidence in its government collapsed and hold-ups in the creation of vital
European stability mechanisms drove speculation that the country could be on the verge of seeking debt relief.
The yield on the country's 10-year bonds rose above 7% on Wednesday, although buying by the European Central Bank (ECB) brought the figure down on Thursday.
Berlusconi's imminent departure will rob European politics of one of its most colourful characters, but it will provide some relief for markets that have been battered by the routine disagreements around vital legislation, the slow progress of reform and the public disagreements with the finance minister, Giulio Tremonti, that have characterised the prime minister's crisis response.
Having served three terms in office 75-year-old Berlusconi was Italy's longest serving post-war prime minister.
The billionaire media-mogul was first elected as prime minister in 1994 having founded his own political party, Forza Italia. He went on to secure two further victories in 2001 and 2008.
Berlusconi did lose power to left-wing Romano Prodi in 1996 and 2006 but bounced back both times. This time it seems less likely the great survivor of European politics will be able to fashion a return.