14 February 2012 Last updated at 12:29 ETMr Monti said the cabinet had taken the decision unanimously
Rome's bid to host the 2020 Olympics has been scrapped after the prime minister said it would be "irresponsible" given the country's economic plight.
Mario Monti said the government could not guarantee to finance the cost of the staging the event, estimated at $12.5bn (£8bn; 9.5bn euros).
The decision comes a day before the deadline for cities to submit bids.
Doha, Istanbul, Tokyo, Madrid and Baku are bidding for the event.
Mr Monti made the announcement at a news conference following a cabinet meeting on Tuesday.
"As you can imagine the government has spent much time reflecting upon this decision," he said.
"And we have reached the unanimous decision that the government... doesn't feel that it would be a responsible gesture, taking into consideration Italy's current financial state.
"In essence, if we find ourselves today in such a difficult financial position it is because similar decisions were made by previous governments without having considered the resulting impact in the following years."
Professor Monti is an economist who was appointed to head Italy's government of technocrats amid financial turmoil last November.
A major effort to restructure the economy is under way, correspondents say, though ratings agency Moody's still cut Italy's credit rating by one notch to A3 on Tuesday.
Gianni Petrucci, president of national Olympic body CONI, was quoted by the Associated Press as saying: "Monti has told us no, it's a great sadness.
"It's a dream that has vanished after two years of hard work, the bid was a serious one. I am convinced that you have to make cuts, but when you make cuts, you have to also cultivate a future dream.
"You need to cut and think about investments and the Olympics are a future investment."
"I don't feel humiliated. Of course, doing it on the last day leaves me feeling really, really bad, there should have been more respect. But, as I said with great conviction to Monti, we did everything we could.''
Article Source : BBC News
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