Monti Forms Technocrat Govt. in Bid to Save Italy from Crisis

Mario Monti took over as Italy's new prime minister and appointed himself finance minister on Wednesday as he unveiled a technocratic cabinet to rescue the eurozone heavyweight from bankruptcy.

The former European commissioner said his new team would focus "on coordinated initiatives for economic growth and development," as he announced he had formally accepted the nomination to replace Silvio Berlusconi.

"It will be a race," the 68-year-old economist told reporters.

Monti, who is due to be formally sworn in at 1600 GMT, also said he would outline his economic program on Thursday with intense pressure from financial markets and international leaders to act speedily to implement reforms.

The new government will go to a confidence vote in parliament on Thursday.

"We have had many signals of encouragement from our European partners and the international community. I believe all this will translate into ... a calming of the market difficulties concerning our country," he said.

Corrado Passera, chief executive of Italy's biggest retail bank Intesa Sanpaolo, will also head up a reinforced economic development and transport and infrastructures ministry charged with boosting the anemic growth rate.

Like Monti, the 56-year-old Passera is an alumnus of Milan's prestigious Bocconi University -- the training ground for Italy's financial elite.

As he scrambled to put together his cabinet this week, Monti sought to build consensus around the idea that Italians will have to make "sacrifices" to exit the debt crisis and has called for "economic, social and civil growth."

He has won endorsements from all of Italy's main political forces but he faces a major challenge in steering a course through a fractious political world, with particularly intense sniping from Berlusconi's allies.

There had been speculation until the last minute over whether or not political representatives would be included in the new cabinet.

"During my consultations I reached the conclusion that the non-inclusion of politicians in my government will actually help it," he said.

The Berlusconi-owned Il Giornale daily was scathing however, with a headline saying: "He Can't Last Long." Some loyalists from Berlusconi's People of Freedom party have called for the return of the colorful billionaire.

The softly-spoken Monti has meanwhile garnered support of more than half of Italians according to a poll by IPR Marketing, which said 53 percent favor him -- though many right-wing voters are still upset over Berlusconi's exit.

Tense markets fluctuated before and after Wednesday's nomination, with the rate on Italian 10-year government bonds hovering around the 7.0-percent warning threshold that has set off alarm bells around Europe and beyond.

Stock market investors also appeared cautious, with Milan at around zero.

Despite his 10-year stint in Brussels, the technocrat has never held office in Italy but has already shown mettle by insisting that his government has to stay in power until 2013 -- the scheduled date for the next general election.

As European commissioner, Monti famously fined U.S. technology giant Microsoft nearly 500 million euros ($672 million at current exchange rates) and blocked a massive $42-billion merger between General Electric and Honeywell.

The departing Berlusconi reportedly spent his last day in office packing up gifts -- a scimitar from Kazakhstan and a Ming dynasty vase from China, which the jocular premier had famously pretended to drop to the horror of diplomats.

After dominating Italian politics for nearly two decades, Berlusconi has made it clear he had no intention of retiring and pledged on Saturday to never give up on the land he loves.

The European Union has already given its firm approval to Monti even before his formal confirmation, but has warned that Italy may need to impose extra budget cuts on top of two austerity plans approved earlier this year.

The EU and the International Monetary Fund this month imposed a humiliating auditing mechanism on the country, the eurozone's third largest economy and an EU founding member, to ensure it is fulfilling its reform promises.

Italy's high public debt of 1.9 trillion euros ($2.6 billion) is relatively stable and its deficit relatively low, but the country's lack of growth and recent political weakness have pushed up borrowing costs.