In a weekend of politics, Italy’s parliament approved economic reforms agreed with European leaders, Silvio Berlusconi resigned as Prime Minister and President Giorgio Napolitano appointed Mario Monti, as head of a new government. 

The process, much faster than usual, was designed to calm markets which last week pushed Italy’s borrowing costs to levels similar to those which forced Ireland, Portugal, and Greece to seek bailouts. 

Treasury is to offers on Monday (EU time) up to 3 billion euros worth of 5-year BTP bonds in an auction that will show if confidence in Italy’s battered public finances has been restored. 

This crisis threatened a European financial meltdown, because the euro zone can’t afford the much bigger bailout that would be needed to save its third largest economy. 

Napolitano said after nominating Monti that there must be a massive effort to address the crisis and Italy could not wait for elections. He said Italy must recover the trust of European institutions and investors.