Italy PM Monti hopes new gov’t can calm markets

In his first public remarks since unveiling his cabinet, Monti also dismissed a suggestion that the appointment of Intesa Sanpaolo CEO Corrado Passera to the infrastructure portfolio could constitute a conflict of interest.

Monti formed a new technocratic government today. The government has the urgent task of tackling a crisis that has pushed Italy's borrowing costs to untenable levels and brought it to the brink of economic disaster.

Monti, a respected economics professor, said he would himself take the crucial economy portfolio in his new government.

He said he would present his austerity programme, to the Senate tomorrow. This is expected to be followed by a confidence vote in both houses of parliament.

The reforms were demanded by European leaders to stem a crisis at the centre of the euro zone's problems.

The new administration was formed in less than three days in a scramble to face the crisis piloted by President Giorgio Napolitano after market confidence in Italy collapsed.

Monti has said his government should last until the next scheduled elections in 2013, despite widespread expectation that politicians intend to give him only enough time to implement reforms before precipitating early polls.