The Straits Times
Published on Dec 11, 2012

Monti vows stability as markets plunge on vote fears


ROME (AFP) - Prime Minister Mario Monti on Monday promised that Italy's next government would be pro-European as financial markets plunged and EU leaders called for stability after the caretaker leader announced he will step down ahead of a general election.

"I am very confident that. . . whatever coalition or government there will be, will be a highly responsible, Europe-oriented government," Mr Monti said on the sidelines of a ceremony in Norway awarding the Nobel Peace Prize to the European Union.

"The markets should not fear a decision-making vacuum" ahead of the elections, he said, warning however that there was a "risk" of populism in the upcoming campaign.

Stocks in Milan closed down 2.2 per cent, and the spread between the yields on Italian and German sovereign bonds widened to more than 360 basis points - a key measure of investor skittishness.