New Italy PM pledges tough reform to face emergency

Italy is facing a serious emergency, new Prime Minister Mario Monti said on Thursday, as he promised rigour and fairness in painful reforms to dig the country out of a financial crisis that threatens the entire euro zone.

Italy is facing a serious emergency, new Prime Minister Mario Monti said on Thursday, as he promised rigour and fairness in painful reforms to dig the country out of a financial crisis that threatens the entire euro zone.

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Making his maiden speech before an evening confidence vote, Monti said the survival of the euro partly depended on Italy embarking on radical reforms in the next few weeks. The European Union is facing its most difficult challenge, he added.

"The government recognises that it was formed to resolve a serious emergency in a constructive and united spirit. I would like to use the following expression: a government with a national commitment," he said.

"Only if we can avoid being seen as the weak link of Europe can we contribute to European reforms," said Monti.

Monti, who is rushing to end a collapse in market confidence that has pushed Rome's borrowing costs to critical levels, said he would consider more reforms after implementing pledges made to the EU but never passed by Berlusconi. The speech confirmed expectations that the respected former European Commissioner would waste no time in pushing through deep reforms of Italy's stagnant economy.

Monti said measures to vanquish a crisis would focus equally on cutting Italy's huge public debt and boosting chronically poor growth.