Monti set to declare intentions as Italy election race begins

ROME Sat Dec 22, 2012 11:14pm GMT

Italy's Prime Minister Mario Monti (C) looks as he makes his speech during a visit to the Fiat car factory in the southern city of Melfi December 20, 2012. REUTERS/Ciro De Luca

Italy's Prime Minister Mario Monti (C) looks as he makes his speech during a visit to the Fiat car factory in the southern city of Melfi December 20, 2012.

Credit: Reuters/Ciro De Luca

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ROME (Reuters) - Italian caretaker Prime Minister Mario Monti is expected to end weeks of speculation about his political future on Sunday when he reveals the role he plans to play in February's national election.

The former European commissioner, appointed to lead an unelected government to save Italy from financial crisis a year ago, has faced calls to seek a second term at the election on February 24-25, but his doubts appear to be growing.

Monti, aware of both the potential risks as well as the opportunities of running in what is likely to be a bitter and messy campaign, will hold a news conference at 1000 GMT.

He could either announce his candidacy directly, endorse a centrist alliance to run in his name, or simply set out a policy agenda in the hope that one or more of the coalitions running in the election will adopt it as their own.

Earlier this week, Italian media were reporting that one of the first two options was probable. But political sources say Monti has been put off by discouraging opinion polls and may not take a front-line role, at least for now.

"On Sunday he will probably only present a policy memorandum, there is unlikely to be any decision on any more direct involvement in the campaign until after Christmas," said one person familiar with the discussions that have been going on between Monti and centrist groups.

While numerous European leaders and Italy's business elite have called for his economic agenda to continue, ordinary Italians, weary of tax hikes and spending cuts, are less enthusiastic.

A centrist group headed by him would probably come a distant third or even fourth in the February 24 election, expected to be won by Pier Luigi Bersani's centre-left Democratic party (PD). One survey published this week showed 61 percent saying he should not stand.

Both the PD and former Prime Minister Silvio Berlusconi's centre-right People of Freedom party (PDL) insist Monti should stay out of the race, and if he runs he would face attacks from both sides of the political divide.

If Monti merely sets out policies, then it would then be up to the parties to sign up to them or reject them, and he would still be free to step into the fray later on, depending on opinion polls.

During his 13 months in office the former economics professor repaired Italy's international standing after the discredited Berlusconi, and passed reforms of the pension system, the labour market and parts of the service sector.

However, many analysts said his reform efforts were too timid to significantly improve the outlook of a chronically sluggish economy, and Monti himself said on Thursday that Italy was "only at the beginning of the structural reforms" required.

Italy, the euro zone's third-largest economy, has been in recession since the middle of last year, consumer spending is falling at its fastest rate since World War Two and unemployment has risen to a record high above 11 percent.

Output is set to contract by more than 2 percent this year and post another, smaller fall in 2013. Despite Monti's austerity the public debt topped 2 trillion euros for the first time in October and is forecast to keep climbing through 2013.

(Reporting By Gavin Jones; editing by Jason Webb)

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