Italian PM to hold talks in Rome

Mario Monti, Italian Prime Minister

Italian PM to hold talks in Rome

Italy's newly-appointed prime minister, Mario Monti is preparing to meet representatives of the two largest political parties as he seeks to form a new government.

But the PDL party of outgoing PM Silvio Berlusconi and the centre-left Democratic Party are seeking concessions in return for support.

Italy has to borrow at high rates of interest as lenders worry that the government may not repay its debts.

Monti was appointed on Sunday after emergency austerity measures were passed by parliament, triggering the resignation of Berlusconi.

Monti described initial talks on Monday as ‘constructive’.

The new prime minister said: "The political powers are conscious that we must have a period of calm to allow us to move forward with a sense of responsibility and cohesion".

Bonds

While acknowledging the urgency of the task he now faces, Monti said he would need to take time to line up a strong team, expected to be made up of non-political technical experts.

In what was seen as the first test of Monti's leadership, Italy sold 3bn euros ($4.2bn) of new five-year bonds on Monday.

However, it had to pay more to borrow the money, a rate of 6.29%, indicating continuing unease in the markets.

Deeply divided party

The 68-year-old Monti needs a newly appointed government to pass a confidence vote in parliament, expected as soon as this week.

All parties agreed on a predominantly technocratic rather than political government but the centre-right PD party remains divided towards the new prime minister, who has said he intends to remain in office until the end of the current legislature - 2013.

Fabrizio Cicchitto, a senior PDL politician, said his party would take a "constructive approach as long as there is debate on the policy proposals and on the government's structure".

The leader of the right-wing Northern League party Umberto Bossi, whose withdrawal of support from Mr Berlusconi's coalition helped precipitate his downfall - has said he would not attend any meetings with Monti.

Bossi, has said he would not support any newly named government in a confidence vote and will only back measures passed on a "case-by-case" basis.

BBC/Waziri/Williams