Italy's Prime Minister Mario Monti's surprise decision to step down from office triggers concerns about the economic stability of the eurozone's fourth largest economy .

Gian Luca Clementi is the professor with the Stern School of Business of New York University.

As Monti has implemented some urgently needed economic reforms, he fears that an election victory for Silvio Berlusconi could put a halt to crucial economic reforms.

SOUNDBITE(ENGLISH): GIAN LUCA CLEMENTI, NYU STERN SCHOOL OF BUSINESS
"The partners in the European Union, most economists outlined what are the reforms that need to be introduced. Mr. Monti's government introduced a few of them, very few, I should say, and there is a lot more to be done. What is important to predict what's going to happen in the near future is what is going to be the willingness of the party or coalitional party that emerges a winner from the next election to actually implement those reforms. And there is where really the problem starts because Mr. Berlusconi in the low probability event that he wins the election, there is very little likelihood that he actually will introduce the reforms".

Experts believe that Mario Monti is aware that Italy is economically at a crossroads and may still decide to form his own political alliance in the upcoming election to run for the Prime Minister's office.

SOUNDBITE(ENGLISH): GIAN LUCA CLEMENTI, NYU STERN SCHOOL OF BUSINESS
"The only hope in the short run I think for Italy is that a third opportunity becomes available and at this point in time the most likely third opportunity is presented by Mr. Monti should he decide to actually run for office in order to gain a full term as a Prime Minister".

Italy is the eighth largest economy in the world and the fourth largest in Europe.

Economists emphasize that ongoing financial turmoil in Italy could put severe pressure on the euro zone as the country is too big to bail out.

SOUNDBITE(ENGLISH): GIAN LUCA CLEMENTI, NYU STERN SCHOOL OF BUSINESS
"The way I see it is that this Italian election is a make it or break it for the European Union as well in the sense that should the outcome be different from the one of a reform government winning and, as I argued, the only reform government that I can see would be one run by Mr. Monti, the essentially it would be clear that Italy would not embrace the path to reform and as such a large economy that essentially would put into jeopardy the euro zone in a way that is unanticipated".

Meanwhile, credit rating agencies have already cut Italy's credit scores.

In July, the credit ratings agency Moody's cut Italy's credit rating from A3 to Baa2.

Moody's also said last month that Italy is suffering from "a sustained and non-cyclical erosion of confidence" in the finance environment and hinted that future downgrades cannot be ruled out.