ROME—Italian Prime Minister Mario Monti resigned on Friday with his political plans still in doubt, paving the way for early elections next year in a lynchpin eurozone state still mired in recession.
Monti kept a promise to step down after losing support in parliament and “handed in the resignation of his government” to President Giorgio Napolitano, the presidency said in a statement.
He will stay on in a caretaker role until the elections.
Napolitano will now begin consultations on Saturday with parliamentary leaders before dissolving the two chambers and calling a general election which most observers expected on February 24.
Monti is then expected to announce his own plans at a press conference on Sunday.
In his last speech as premier, Monti said that his stormy 13 months in government had been “difficult but fascinating” and voiced hope that his reform agenda will be continued by any new leader.
Italy was now “more reliable” on the world stage and the euro was in a better state “also thanks to Italy,” he told foreign ambassadors in Rome.
The 69-year-old has won praise at home and abroad for rescuing Italy from the brink of bankruptcy with tough austerity, launching long-delayed pension and labour market reforms and joining other eurozone leaders in battling the debt crisis.
Monti said he would step down earlier this month after his flamboyant predecessor Silvio Berlusconi withdrew his support for Monti and announced he would run for a fourth term as prime minister.
The government’s mandate had been due to run out in April.
“The technocratic government is finishing today and we hope there will no longer be a suspension of democracy,” Berlusconi told reporters after the resignation announcement.
Roberto Maroni, leader of the Northern League party which has opposed the Monti government, said on Twitter: “Monti has resigned, about time!”
‘Bitter medicine’ for Italy
The current favourite to win the elections is centre-left leader Pier Luigi Bersani but things could change if Monti decides to join the campaign and back a coalition of small centrist parties as some local media have been reporting.
A former economy minister and leader of the Democratic Party, the cigar-chomping ex-communist Bersani, 61, has promised to stick to Monti’s reforms but also do more to bring down unemployment and to tax the rich.
Monti’s name cannot officially be on the ballot as he is already a senator for life, but the former economics professor can still be appointed to a post in government including prime minister or finance minister after elections.
Sources close to the technocrat premier insist he has not yet decided whether to join the fray, despite appearing to launch a bid for a weighty role in the campaign with a rousing speech at a Fiat factory on Thursday.
“I think it would be irresponsible to waste all the sacrifices that Italians made,” he said after sniping from Berlusconi who has promised to put an end to austerity measures and to abolish a property tax introduced by Monti.
After taming the markets and bringing down bond rates from more than 7.0 percent when he started out to just over 4.0 percent this week, he also defended his “bitter medicine” saying a simple aspirin could not cure Italy.
Markets were cautious on Friday, with the Milan stock exchange closing 0.40 percent lower and the yield on sovereign bonds rising slightly.
The business world and the Catholic Church have been hugely supportive of Monti but his popularity has been hit among ordinary Italians as the debt-laden country grapples with record-high unemployment and a recession-hit economy.
Monti was installed by president and parliament as the head of an emergency technocratic government in November 2011 after the larger than life Berlusconi was forced to step down amid a financial crisis and a slew of sex scandals.
Many Italians breathed a sigh of relief but Monti’s popularity rating has fallen to around 30 percent in recent months compared to more than 60 percent when he started as austerity measures begin to bite.
Bersani has cautioned Monti against running, as has the 76-year-old billionaire Berlusconi who said the outgoing prime minister risked becoming a “small player” on the political scene.
Monti “has bowed down in front of EU requests, particularly those of the ‘German European Union’ of northern Europe, which only lead to recession,” Berlusconi said on Friday in an interview.
The party lover was convicted of tax fraud in October and is a defendant in a trial for having sex with an underage prostitute and abuse of office. Berlusconi denies all charges.