Addressing the Italian senate on Thursday night, Mario Monti said Europe was living through its "most difficult moments since the aftermath of the second world war". And he warned that "the end of the euro would pull apart the single market".
The Monti government's first day in office was clouded by a warning from former prime minister Silvio Berlusconi that it would last only as long as he and his supporters wanted. Berlusconi, who could still command a majority in the senate, was quoted as having told his followers in the upper house that he would be deciding whether to support the government bill by bill.
In Milan, meanwhile, police clashed with demonstrators protesting at austerity measures and the new political importance assumed by Italy's financial elite. Monti was the rector of Milan's business-oriented Bocconi University and his industry ministry, Corrado Passera, was the head of the country's biggest retail bank, Intesa Sanpaolo.
Presenting his government's programme to the senate, Monti, a former European commissioner, sent a warning that Italians could expect yet another package of deficit-reduction measures. He said it would ensure "full implementation" of initiatives already agreed with European institutions. But he added: "We shall assess further correctives."
Measures worth €80bn (£68bn) were wrapped into a bill that was given final approval in parliament last Saturday. But plans to eliminate Italy's budget deficit by the end of 2013 have been derailed by an emerging consensus that the economy will barely grow next year.
Calculations in Brussels and Rome have suggested that this could create a gap of about €25bn. One of Monti's first challenges will be to find ways of saving that sort of sum without inflicting too much pain on the public.
He made it clear that one move under consideration would be to reverse the Berlusconi government's exemption of first homes from property tax. He called it "a peculiarity, if not an anomaly" of the Italian tax system.
But the new prime minister also held out the promise of reforms to make the economy more flexible, productive and equitable. Reintroducing the property tax on first homes would fit a policy of shifting the fiscal burden from employment to consumption and property.
In a speech of just under 45 minutes, he alluded to changes in employment law "to distance us from a two-tier [labour] market in which some are excessively protected and other lack safeguards and assurances". Another priority was to make it easier for women to enter – and remain in – jobs.
Monti said Italy's pension system was among the most sustainable in Europe. But it was marred by imbalances in the way people were treated according to age and other criteria.
He also suggested that his government had in its sights "educational levels that are clearly below the European average".
Setting in train the changes he would like to see would take up at least the year and a half, which is the maximum at his disposal. A general election has to be held by the spring of 2013.
It is clear, however, that Monti will be looking over his shoulder at his predecessor. At a private meeting, Berlusconi was reported to have said he expected the government to pass legislation his own cabinet had in the pipeline when it was toppled last week. It included bills that would have eased Berlusconi's legal problems.
guardian.co.uk
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