* Monti threat to discredited politicians
* Seeks definitive confidence vote later
* Sweeping and painful reforms
By Paolo Biondi
ROME, Nov 18 Prime Minister Mario Monti
warned Italy's politicians on Friday not to undermine his new
technocrat government as he sought a vote of confidence in
parliament for a sweeping package of reforms to pensions, taxes
and job protection rules.
Monti, appointed on Wednesday to succeed Silvio Berlusconi
after the discredited centre-right leader lost his majority in
parliament, said he intended to serve until the next scheduled
election in 2013.
Seeking the approval of the lower house, which he is sure to
get after winning a first vote of confidence in the Senate on
Thursday, Monti said his success in passing deep and painful
reforms would depend on maintaining the support of parliament.
"I'm not asking for a blind vote of confidence. We're asking
for a vigilant vote of confidence," Monti said in a speech to
"But we think that if we do a good job, then you too, when
you give us a vote of confidence or withdraw it, should remember
what the consequences will be for citizens' confidence in you,"
The remark was a clear warning to squabbling politicians who
have attracted public outrage for failing to take action as
Italy slipped closer to an economic abyss after its borrowing
costs soared out of control under Berlusconi.
There are wide suspicions that the politicians, forced to
acquiesce in a technocrat government by the power of
international markets, would like to topple Monti within months.
The former European Commissioner laid out his policy
priorities in a maiden speech to the upper house on Thursday in
which he outlined a mix of pension and labour reforms and hinted
he would reintroduce a housing tax scrapped by Berlusconi.
Following approval in the Senate, Monti is expected to gain
full parliamentary confirmation in the lower house in a vote at
around 1500 GMT.
The former European Commissioner has received the backing of
all the main parties except the pro-devolution Northern League
and is sure to pass the vote.
However Berlusconi's centre-right People of Freedom (PDL)
party has made clear that its support is conditional and it has
opposed key options in Monti's reform agenda, notably the
possible levying of a wealth tax on privately held assets.
PULL THE PLUG
Financial markets, roiled by the escalating euro zone debt
crisis, appeared to welcome Monti's speech on Thursday, with
yields on 10 year bonds dipping below the 7 percent level widely
seen as a symbolically critical red line.
But they remain at untenably high levels of over 6.7 percent
and the spread over German Bunds -- the risk premium paid by
investors to hold bonds considered less safe than benchmark
German paper -- is more than 480 basis points.
Italy, the third largest economy in the euro zone with a
decade of anaemic growth and one of the world's highest public
debts, has been at the centre of the Europe-wide financial
crisis because of fears it would be forced to seek a bailout
that would overwhelm the EU's financial defences.
However, with the European Central Bank in the market buying
Italian bonds, attention has shifted to other countries
including France and Spain, which are also considered
Berlusconi himself has underlined the threat of an early end
to the uneasy political truce which followed Monti's
appointment, telling supporters the centre-right could "pull the
plug" on the government whenever it chose.
"If it were possible to give the idea of our dependence on
parliament in some way other than 'pulling the plug', I would be
grateful," Monti remarked pointedly in a speech in which he gave
lengthy thanks Berlusconi and his chief of staff Gianni Letta
for their help during the transition.
Berlusconi had been expected to address parliament but in an
entry on his Facebook page said he had decided to leave PDL
secretary Angelini Alfano to deliver the party's response.
Monti dismissed complaints that his non-elected
administration had been imposed undemocratically by the
so-called "grandi poteri" or great powers, the big business and
church establishment which had become openly hostile to
Berlusconi's scandal-plagued government.
However protests against the "bankers' government" by
thousands of students across Italy on Thursday highlighted the
problems the non-elected administration will face in pushing
through painful austerity measures that will hit millions of