Mario Monti heralds new era for Italy

Economist Mario Monti won lukewarm approval from still tense markets on Monday as he rushed to form a new government within days to lead Italy out of an alarming debt crisis rocking the eurozone.

Economist Mario Monti won lukewarm approval from still tense markets on Monday as he rushed to form a new government within days to lead Italy out of an alarming debt crisis rocking the eurozone.

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The technocrat launched talks with political leaders set to conclude on Tuesday but has already won endorsements from Italy's main parties and big business since being nominated to replace Prime Minister Silvio Berlusconi.

Monti is under intense pressure from the international community to fill the political vacuum in Rome and implement key economic reforms and according to newspaper reports he is trying to forge the cabinet within 48 hours.

"Italy must again be and must increasingly be an element of strength, not weakness in a European Union that we helped found and in which we should be protagonists," the 68-year-old Monti said on Sunday.

Italian stocks jumped more than 2.0% at the start of trading and the euro climbed against the dollar. Stocks later moved into negative territory in line with falls on other European stock markets.