Italy’s Grilli Supports Monti, Downplays Market Concerns
Italian Finance Minister Vittorio Grilli gave his support to Mario Monti, the unelected prime minister challenged by his predecessor Silvio Berlusconi’s possible comeback bid, and sought to reassure investors on the country’s outlook.
Monti “has done a wonderful job and has taken the country in a very difficult moment and rebuilt credibility for our country,” Grilli said. “I cannot say whether or not,” Monti will run for office, “but I’m sure he is committed to the country and will still be there and will be a great help in the future.”
Monti’s Dec. 8 announcement that he plans to resign sent Italian bond yields soaring because of concerns over whether the next government would maintain his economic reforms. Monti, 69, an economist who heads an unelected government of non- politicians, enjoyed widespread support at the start of a two- day summit of European leaders in Brussels yesterday.
Grilli, 55, was promoted to finance minister under Monti and had a decade-long experience working at the ministry, mostly under Monti’s predecessor, Berlusconi, the three-time prime minister who has confused voters and investors alike on his political intentions.
After announcing his de-facto political retirement in October, Berlusconi said this month he planned to run in election that will probably be held in February. He then withdrew his support for the Monti government, a move that prompted the premier to announce he would resign once parliament passes the 2013 budget this month. Berlusconi this week offered to drop plans to run if Monti would enter the race as the head of a coalition of “moderate” parties.
Italy’s 10-year bond yield on Dec. 10 jumped 29 basis points, the most since August, after Monti announced his resignation.
“We knew that political elections are coming up, and that is part of the uncertainty which is linked to any political election,” Grilli said. “I would downplay these kinds of worries. I think probably the markets are judging the events with a grain of salt.”
Asked if he thought Monti should enter the race for the elections, Grilli responded: “That is very hard to say.”
Italy’s 10-year bond yield has fallen by more than 200 basis points since Monti was appointed in November 2011. He came to power after 10-year bond yields surged to a euro-era record 7.5 percent, contributing to Berlusconi’s decision to resign.