Italian prime minister-designate Mario Monti began talks yesterday to create a new government of non-political experts tasked with overhauling an ailing economy to keep market fears over the country from threatening the existence of the euro.
In a vote of confidence in Monti and his ability to quickly form a new government, the Italian government’s borrowing rates on the secondary bond market sank.
Former Italian prime minister Silvio Berlusconi resigned over the weekend, as promised, after both houses of parliament passed emergency austerity and reform measures with unusual speed.
Italian President Giorgio Napolitano tapped Monti on Sunday to create a government capable of implementing economic reforms aimed at reviving stagnant growth to bring down public debt, stuck near 120 percent of GDP.
Yesterday, the yield on the benchmark 10-year bonds was at 6.28 percent — after spiking last week well above the 7 percent level that forced three other eurozone countries to need bailouts. The yield is indicative of the rate the government would pay if it were to tap financial markets to raise cash.
Monti said on Sunday that he would act “with a sense of urgency” to identify ministers in the new government, but said he would also take the time necessary to secure a strong team.
The 68-year-old economics professor proved his mettle as European competition commissioner in the 1990s. However, he’ll have to win a confidence vote in Parliament before he can lead the nation.
GREECE
Greek Prime Minister Lucas Papademos was scheduled to present his policy platform to parliament yesterday, ahead of a midweek confidence vote in his coalition government that is tasked with implementing crucial reforms and securing the country’s international loan lifeline.
Papademos, a former central banker picked by broad party consensus last week, is expected to easily win a vote of confidence tomorrow.
His interim coalition government is backed by Greece’s two biggest parties and a small right-wing nationalist party. It has a mandate to govern the austerity-fatigued country over the next three months, with national elections tentatively scheduled for February.
The tough work lies ahead. Papademos’ government must pass next year’s austerity budget, approve a new 130 billion euro (US$177.5) international bailout cobbled together last month, and see through lagging reforms that will include thousands of public sector layoffs. Most crucially, it must secure the next 8 billion euro installment of the rescue loans without which the country will go bankrupt before Christmas.
Greek Finance Minister Evangelos Venizelos has said he hopes the next loan installment will be approved by his 16 eurozone colleagues in a Thursday teleconference. Greece’s eurozone partners are first seeking a written commitment from Athens to support the second bailout, signed by Papademos, the leaders of the main Socialist and conservative parties, the central bank governor and the finance minister.
However, it is unclear whether conservative New Democracy party leader Antonis Samaras will agree to do so. He has expressed outrage at the demand, arguing that he has already pledged to back the deal and his word should suffice.
Greeks have suffered about 20 months of austerity, with repeated pension and salary cuts compounded by a spate of tax increases. Unions have reacted with a wave of general strikes and demonstrations. A small left-wing party has called an anti-austerity protest just ahead of Papademos’ speech in parliament.
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Nearly half of China’s major cities are suffering “moderate to severe” levels of subsidence, putting millions of people at risk of flooding, especially as sea levels rise, according to a study of nationwide satellite data released yesterday. The authors of the paper, published by the journal Science, found that 45 percent of China’s urban land was sinking faster than 3mm per year, with 16 percent at more than 10mm per year, driven not only by declining water tables, but also the sheer weight of the built environment. With China’s urban population already in excess of 900 million people, “even a small portion
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