New crisis for the Euro as Italian PM Mario Monti quits after his budget is approvedThe Italian Prime Minister stepped down after the country's parliament approved his budgetHis decision to quit raises the prospect that Silvio Berlusconi could once again become Italy's leader
20:16 GMT, 21 December 2012
Italian Prime Minister Mario Monti resigned tonight, in another potential crisis for the Euro.
He stepped down after the Italian parliament approved his budget.
The widely-respected economist is credited for steadying the Italian economy following the premiership of Silvio Berlusconi.
Resignation: Mario Monti stepped down as Italian Prime Minister after the country's Parliament approved his budget
Mr Monti’s resignation will force fresh elections early next year but it is not known yet whether the 69-year-old will stand.
President Giorgio Napolitano, who chose Monti in November 2011 to come up with reforms to shield Italy from the continent's debt crisis, asked Monti to stay on as head of a caretaker government until the national vote, expected in February.
Mr Monti's address to diplomats coincided with the lower house of Parliament's final approval of the budget law, which the premier promised to see through before stepping down.
Potential crisis: The resignation of Mr Monti, seen with David Cameron outside 10 Downing Street, raises the prospect that Silvio Berlusconi could again become Italy's leader
‘The work we did in the last 12 months has made the country more trustworthy, besides more competitive and attractive to foreign investors,’ Mr Monti said.
He cited structural reforms, such as measures to improve competition and liberalize services, as well as the recently approved anti-corruption law.
Mr Monti took over as head of a
technical government in November 2011 as Italy’s borrowing costs soared
in a clear market vote of no-confidence in Silvio Berlusconi’s ability
to reform Italy’s economy.
But his decision to stand down raises the prospect that Mr Berlusconi could once again be the country’s next leader.
The controversial figure has been toying with a return to electoral politics.
Earlier this month he said he would run for office again and was running to win.
view his attempt to win office as a way of delaying any possible jail
term for offences on which he is currently standing trial.
week, Italian prosecutors called for a one year jail term for the
76-year-old for allegedly revealing confidential information about an
investigation into a financial scandal.
It was also reported last week that the twice married Mr Berlusconi had got engaged for a third time, this time to a 27-year-old.