Monti to form new Italy government

Prime Minister designate Mario Monti will meet Italy's president on Wednesday to present a new government to face a crisis that has brought Italy to the brink of economic disaster and endangered the entire euro zone.

A statement from the presidential palace announced that Monti, appointed only on Sunday, would meet Giorgio Napolitano at 11 am (1000 GMT). He is expected to announce a cabinet composed mainly of technocrats but it was not clear when the government would be sworn in.

Monti later told reporters that the "framework is now clearly delineated" for his government but declined to give details, saying he would work them out "in the next few hours" and brief the president on Wednesday.

"I would like to confirm my absolute serenity and conviction in the capacity of our country to overcome this difficult phase," Monti said.

Monti completed the process of forming a government in less than three days, much less than normal, as Italy races to ward off a major financial and political crisis that has pushed its borrowing costs to untenable levels.

The new administration led by former European Commissioner Monti must push through a tough austerity programme demanded by European leaders to restore shattered confidence in Italy.

Underlining the pressure on Monti to act fast was renewed market turmoil , with yields on Italy's 10 year BTP bonds climbing to over 7 percent on Tuesday, the level at which Greece and Ireland were forced into bailouts.

Emma Marcegaglia, head of employers association Confindustria, told reporters after meeting Monti: "We said we will support his government very much. We think this government is the last chance for Italy to exit from this situation of emergency".

Monti's chances were considerably boosted earlier by backing from the PDL party of Silvio Berlusconi, who was forced to step down on Saturday by the crisis.

Angelino Alfano, secretary of the centre-right PDL, told reporters: "We think that the efforts of Professor Monti are destined to have a good outcome."

Backing from the PDL, Italy's biggest party, was significant because many of its members had until now opposed the predominantly technocrat government Monti is putting together.