Business, Finance & Economics

Italy's new PM Monti in talks with main parties as cost of bonds rises


Newly-named Italian Prime Minister Mario Monti (L) leaves the presidential palace on Nov. 13, 2011, after Italian President Giorgio Napolitano nominated him to form a new government.



Italy's newly appointed Prime Minister Mario Monti will on Tuesday morning meet representatives of the country's two largest political parties, as he looks to form a new government.  The meetings comes as the cost of borrowing has risen once again to the 7 percent danger level, putting pressure on Monti.  

According to BBC News, the Italian bond yield reached 7.039 percent on Tuesday, indicating that markets were anxious about the country's debt.  

Monti – a former European commissioner – is seeking a cross-party consensus for economic reforms, the BBC reported.

The talks will include members of outgoing prime minister Silvio Berlusconi’s conservative PDL party and the center-left Democratic Party – which are seeking concessions in return for parliamentary support.

More on GlobalPost: Mario Monti asked to lead new Italian government

Both parties want representation in an administration that is expected to mainly consist of non-political appointees, Al Jazeera reported.

Monti said on Monday that Italians may be forced to make "sacrifices", and he urged patience from the financial markets while he chooses his cabinet.

His supporters warn that political wrangling could slowing the process of forming a government, and further erode the confidence of investors.

More on GlobalPost: Europe: the crisis continues

Monti says he hopes his government will remain in office until 2013 -- when the next elections are due.

Italy is the third-largest economy in the euro zone.