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Italy PM to show austerity plan to tackle Italy crisis Italy: PM Monti unveils crisis plan as students protest
(about 7 hours later)
Newly-appointed Italian Prime Minister Mario Monti is due to outline austerity measures aimed at steering the country out of its debt crisis. Italy's new PM Mario Monti has outlined plans to tackle the country's economic problems and cut its debt, amid student protests in several cities.
He will present his plans to the Italian senate ahead of a confidence vote in the upper house. The former EU commissioner said austerity measures would be balanced by economic growth and social fairness.
Mr Monti, who has unveiled a cabinet of technocrats, has revealed little about his plans, but they are expected to follow demands made by the EU. "The future of the euro also depends on what Italy will do in the next few weeks," he told senators in Rome.
He has said he is convinced that his new government will restore confidence. Meanwhile, police in Milan clashed with protesters heading for a university chaired by Mr Monti.
Mr Monti is tasked with reducing public debt of 1.9tn euros ($2.6tn; £1.6tn) and restoring economic growth. Mr Monti formed his cabinet, made up of business leaders and other experts, after the centre-right government of Silvio Berlusconi fell last week under market pressure.
On Wednesday, Italy's borrowing costs fell back below the critical 7% level - the level at which Greece, Portugal and Ireland were forced to accept an IMF bailout - after the European Central Bank intervened and began buying up Italian bonds. The Senate will hold a confidence vote on the new government on Thursday evening.
Mr Monti, a former EU commissioner who has was officially sworn in on Wednesday, appointed a banker to lead a super-ministry of development, infrastructure and transport. On Thursday, French and Spanish borrowing costs shot up as the spread between their bonds and those of Germany hit a record.
His decision to personally handle the finance portfolio was welcomed by Jean-Claude Juncker, chairman of the euro zone finance ministers group. 'We are Europe'
Mr Juncker said Mr Monti was "the man for the situation" and added: "The rapid and implementation of all the measures voted recently by the Italian parliament must be a priority to return the country to the path of political credibility". "If we fail, if we don't carry out the necessary reforms, we will also be subjected to much harsher conditions," Mr Monti said.
German Chancellor Angela Merkel said she would meet Monti as soon as possible. The "absence of growth" had "cancelled out sacrifices" by Italians, he argued, promising to respect Italy's timetable to balance its budget by 2013 and reduce its debt.
No politicians "We don't see the European obligations as imposed by external forces," he said.
"It's not a case of them on one side and us on the other. We are Europe."
As Mr Monti appeared in the Senate, student demonstrations were reported in Rome and other Italian cities
  • Riot police intervened in Milan after hundreds of students protesting against the "bankers' government" tried to reach Bocconi University, which is headed by Mr Monti, an economist
  • In Palermo, Sicily, demonstrators reportedly hurled eggs and smoke bombs at a bank, and others threw stones at police
  • In Rome, hundreds of students gathered outside Sapienza University, while others assembled near the main train station, apparently with the aim of marching on the Senate
Corrado Passera, CEO of the Intesa Sanpaolo banking group, was named to head the new ministry of development, infrastructure and transport.Corrado Passera, CEO of the Intesa Sanpaolo banking group, was named to head the new ministry of development, infrastructure and transport.
Another key appointment was that of Antonio Catricala, head of the anti-trust authority, who was made under-secretary to the prime minister's office.Another key appointment was that of Antonio Catricala, head of the anti-trust authority, who was made under-secretary to the prime minister's office.
Despite reports that Mr Monti had sought to include politicians in his cabinet, there are none.Despite reports that Mr Monti had sought to include politicians in his cabinet, there are none.
"The absence of political personalities in the government will help rather than hinder a solid base of support for the government in parliament and in the political parties because it will remove one ground for disagreement," he said."The absence of political personalities in the government will help rather than hinder a solid base of support for the government in parliament and in the political parties because it will remove one ground for disagreement," he said.
Correspondents say it looks almost certain that Mr Monti will receive the backing of lawmakers during Thursday's confidence vote in the Senate, and a subsequent vote in the lower house on Friday. Correspondents say it looks almost certain that Mr Monti will receive the backing of senators during the confidence vote in the Senate, and a subsequent vote in the lower house on Friday.
Only one party, the right-wing Northern League, says it will withhold its support though former Prime Minister Silvio Berlusconi has reportedly said he could "pull the plug" on the government if he does not like what it does.Only one party, the right-wing Northern League, says it will withhold its support though former Prime Minister Silvio Berlusconi has reportedly said he could "pull the plug" on the government if he does not like what it does.