Fellow European leaders have heaped praise on Italian prime minister Mario Monti, as he sought to reassure them his country would not be left adrift following his surprise decision to resign and the return to front-line politics of Silvio Berlusconi.
Mr Monti’s announcement that he would quit soon because Mr Berlusconi’s People of Freedom party had withdrawn its support for his technocrat government pushed up Italy’s borrowing costs and prompted a stock market sell-off yesterday.
“I understand market reactions. They need not be dramatised,” Mr Monti said in Oslo, where the Nobel Peace Prize was awarded to the European Union and where other EU leaders queued up to praise him.
Mr Berlusconi reacted angrily last night to negative comments from foreign politicians and media about his decision to run as a candidate to lead Italy for a fifth time, calling it an offensive interference in domestic affairs.
He said he had always been a “convinced supporter of Europe” and that the comments criticising him were “out of place” and “offensive not so much to me personally but to the free choice of the Italians”.
He suggested “interference” in Italian affairs may be an attempt to weaken the share price of Italian companies and make them easier takeover targets.
Mr Monti, meanwhile, said he was confident the elections would produce a responsible government “which should be in line with the huge efforts already pursued by Italy”.
The campaign for an election expected in mid-February is likely to be fought over Mr Monti’s reform agenda, which Mr Berlusconi, his predecessor as prime minister, said had condemned Italy to recession.
European leaders were anxious to stress any new government must stick to an economic reform agenda. “Monti was a great prime minister of Italy and I hope the policies he put in place will continue after the elections,” European Council president Herman Van Rompuy said.
There were similar comments from leaders ranging from French president Francois Hollande to head of the European bailout fund Klaus Regling and European Commission president Jose Manuel Barroso.
Spanish economy minister Luis de Guindos warned that instability in Italy could spill over and put Spain’s fragile public finances at risk of further turmoil.
Attention is now focused on whether Mr Monti will enter politics himself, either as a candidate or by endorsing one of the centrist forces that have backed his reforms and made more or less explicit pleas for him to run.
Mr Berlusconi’s reappearance on the front line and the prospect of a messy anti-Monti campaign reawakened memories of the financial and sex scandals that peppered the media magnate’s last government.
Not that such memories have had much chance to slumber. Yesterday, the prosecutor in his trial on charges of having sex with a juvenile prostitute accused the 76-year-old of delaying tactics after the woman failed to appear as a witness.
Karima el-Mahroug was due to testify but told her lawyer by text she was out of the country and gave no indication when she would return.
Prosecutor Ilda Boccassini claimed Ms el-Mahroug, known as Ruby, had been kept away by the defence team to delay the trial until after the elections.
Berlusconi attorney Niccolo Ghedini shot back, calling Ms Boccassini’s allegation “defamatory” and saying he had already trimmed back his witness list to not drag out the trial.
The Ruby trial stems from alleged encounters at the so-called “bunga bunga” parties Mr Berlusconi threw at his villas – a scandal that helped bring about his downfall last year.
The Roman Catholic Church has also made thinly veiled criticism of the former premier. “What leaves one astonished is the irresponsibility of those who think of arranging things for themselves while the house is still burning,” the head of the Italian bishops’ conference said.