Post Berlusconi: Mario Monti Takes On Italy's Woes

After a week of market turmoil over the worsening eurozone crisis, hopes are high that the appointment of economist Mario Monti to head a technocratic government in Italy will reassure lenders that the country can speed economic overhaul. Monti could face obstruction from lawmakers of outgoing Prime Minister Silvio Berlusconi's party.

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And I'm Renee Montagne. We'll find out soon if Europe is edging past the latest crisis point over its debts. Italy has a new leader this week. Mario Monti is an economist. His job is to establish a government of experts who can reassure the lenders driving up Italy's cost of borrowing. He replaces Silvio Berlusconi, the media tycoon who was forced to surrender his job over the weekend. But while Berlusconi lost his job as prime minister, his party still has a lot of power, and he could use it against the new government. NPR's Sylvia Poggioli reports.

SYLVIA POGGIOLI, BYLINE: Italy just experienced a weekend of frenetic political activity: parliament rushed approval of a package of austerity measures, the flamboyant Prime Minister Silvio Berlusconi resigned, and chief of state Giorgio Napolitano appointed Mario Monti to succeed him. Highly respected in academic and international circles, Monti made his debut as premier-designate before the media last night. He said Italy must win the challenge to bounce back and be an element of strength, not weakness, in the European Union. He also gave an inkling of how he'll tackle Italy's economic disarray.

INTERIM PRIME MINISTER MARIO MONTI: (Italian spoken)

POGGIOLI: We will focus on healing Italy's finances, he said, and we will follow the path of growth, with greater emphasis on social equity. We owe to our children, Monti added, to give them a concrete future of dignity and hope.

Pressure on Berlusconi to step down came after global markets pummeled Italy's borrowing power and shook its stock market, dealing a serious blow also to Berlusconi's vast business empire. Last night, he spoke out for the first time since his resignation in a video-taped message broadcast on prime-time news programs. It was a far cry from the ebullient master salesman who dominated Italy for 17 years. He looked forlorn and appeared still stunned by his rapid fall from government power.

SILVIO BERLUSCONI: (Through translator) I resigned out of a sense of responsibility and statesmanship. I did it to spare Italy another attack from financial speculators.

POGGIOLI: Berlusconi said he will back Monti, but he vowed he would make his presence felt in parliament, and many of his supporters want early elections now. Three editors of newspapers either owned by or sympathetic to Berlusconi organized a rally in Milan to denounce their new nemesis: global markets perceived as dictating events in Italy. Editor Giuliano Ferrara raised the specter of a coup d'etat.

GUILIANO FERRARA: (Through translator) Once upon a time, tanks were used to overthrow the democratic process. Now it's the markets and the fear of spreads.

POGGIOLI: Berlusconi's People of Liberty Party is demanding that the Monti government have a very limited mandate and timeframe. Monti, who has the strong backing not only of President Napolitano, but also of Italy's EU partners, says he intends to remain in charge as long as necessary to implement fundamental reforms. The European Union has already said the austerity package approved this past weekend will not be enough to make a dent in Italy's $2.6 trillion debt. Analysts say Monti will have an uphill battle in pushing through more budget cuts, labor market and pension reforms, as well as tax hikes, with opposition likely not only from the Berlusconi flank, but also from trade unions and Italy's professional guilds.

But in just a few days, Monti seems to have won a large degree of popular support. He has already impressed the usually-jaded Romans by moving around the city on his own, without bodyguards. Schoolteacher Francesco Cavallaro says he's optimistic that Monti can put Italy back on its feet.

FRANCESCO CAVALLARO: (Through translator) I had always hoped Monti would be the next prime minister - not only to cure the economy, but also to put order back into society's customs.

POGGIOLI: Housewife Susanna Tosi is impressed by Monti's honesty.

SUSANNA TOSI: (Through translator) We want a real government, neither left nor right. We want it to be run by people who work to defend citizens, not their personal interests.

(SOUNDBITE OF MUSIC, "THE HALLELUJAH CHORUS")

PERMANENT MUSICAL RESISTANCE: (Singing) Hallelujah. Hallelujah.

POGGIOLI: Those were the sentiments of people celebrating Berlusconi's resignation Saturday in Rome, where the group Permanent Musical Resistance performed Handel's "Hallelujah Chorus," a well-spring of collective relief that could help Mario Monti in his daunting task ahead. Sylvia Poggioli, NPR News, Rome.

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