Italian Premier Mario Monti to resign

Italian Premier Mario Monti to resign

Premier Mario Monti told the Italian president Saturday he is resigning after Silvio Berlusconi's PDL party withdrew its support for the government  saying he can no longer govern after Silvio Berlusconi’s party withdrew  support. This paves the way for early elections a year after the unelected economist helped pull the country back from the brink of financial disaster.

Only hours earlier, Berlusconi announced he would run for a fourth term as premier, aiming for a dramatic comeback, considering the billionaire media baron quit in disgrace in November 2011.Former Prime Minister Mr Berlusconi said he will run for office again next year.He said Mr Monti's austerity policies had harmed Italy.Mr Berlusconi's People of Freedom party withdrew its support from the government on Thursday.

The office of President Giorgio Napolitano, who met for nearly two hours with Monti at the presidential palace, said the premier told the head of state that without the support of Berlusconi’s party, “he cannot further carry out his mandate, and consequently made clear his intention to resign” once Parliament passes a crucial budget bill soon.

Political turmoil in Italy, mired in recession and trying to escape the eurozone sovereign debt crisis, could spook financial markets, which, with Monti at the helm, had steadily regained faith in the country’s ability to honor its debts.

Standard & Poor’s rating agency, indicating on Friday that it could lower Italy’s rating if the recession endures well into 2013, cited “uncertainty” over whether the next Italian government could stay the tough course