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Italy Awaits Market Reaction to Monti Exit

By Frances D'Emilio

ROME -- Italy and the rest of Europe on Sunday anxiously awaited the reaction of financial markets to Premier Mario Monti's surprise decision to resign and set the stage for an early vote, as speculation abounded over whether he might dive into politics and challenge Silvio Berlusconi in the election.

Monti has been widely credited with restoring faith in the country's capacity to survive the eurozone debt crisis since he took over the helm of a nonelected "technocrat" government. But he told the Italian president Saturday it was impossible to continue to lead after Berlusconi's party, Parliament's largest, dropped its support and blamed his austerity measures for Italy's staying mired in recession.

"We'll see what the markets will do," President Giorgio Napolitano told reporters asking whether he was worried about the repercussions of the political crisis, including how it would affect its credibility and financial ratings.

It was Napolitano who appointed Monti, an internationally respected economist, last year to replace Berlusconi, the three-time premier whose resistance to potentially unpopular austerity measures panicked financial markets and helped set Italy tottering toward a Greece-style debt crisis.

Monti told Napolitano he would step down as soon as Parliament passes a budget bill, likely within two weeks, setting the stage for elections as soon as February.

Monti's accomplishments at the helm of the nonpartisan government included steering through Parliament tough pension reform, higher sales taxes and a revived property tax. He nonetheless enjoys high popularity ratings.

Supporters have encouraged Monti to run for the premiership. Speculation about whether he would face off with Berlusconi and others has been rife in the media, and Italians were lamenting his early departure.

A video and song quickly put together by popular Italian comedian and TV host, Rosario Fiorello, made the rounds of the Internet. The video shows Sunday's newspaper headlines about Monti's decision to quit and Berlusconi's bid to return to power.

"Let's do ourselves some harm, as only we know how to do" Fiorello sings in Italian as the camera pans the headlines. "We're Italians. We like to suffer."

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