Monti Python and the Holy Grail: Why Italy’s Prime Minister can’t win over his people
Already sore with incredulity at the eurocrisis mess, EU citizens who tuned in for a fresh dose of euro cliff-hanger pain at the Brussels leaders summit on Thursday and Friday may have been taken aback by what commentators are calling a surprisingly positive result. There were agreements on a banking union, funds to prop up banks and a a growth package. But one problem could render the belated agreements meaningless: Italy. And their leader’s blundering search for his Holy Grail: popular approval for the reforms that he thinks will save his country’s economy.
Italy, with its faltering economy that has come with a price tag of debt levels worth 120 per cent of its GDP, has long been the elephant in the room at eurocrisis talks. But the possibility of Italy bringing down the euro if it doesn’t sort out its problems is very real and economists have consistently warned of the dangers. The maths is a no-brainer: so far, countries have needed bailouts of roughly 40 per cent of GDP (such as Ireland and Portugal – the exception is Greece, which has now had two bailouts worth more than 100 per cent of its GDP). For Italy, a bailout worth 40 per cent of its GDP would be over 670 billion euros. But the new bailout fund, the European Stability Mechanism (ESM), will only have a capacity of 500 billion euros.
Italy’s technocratic Prime Minister, Mario Monti, who came into office to replace the former leader Silvio Berlusconi in November 2011, denies that his country needs a bailout and insists he is making the reforms necessary to wrench the economy from its torpor. Yet, Italy’s growth forecasts were revised down to minus 2.4 per cent this week. Employment is expected to spike to nearly 12 per cent in 2012. Moreover, inflation has risen and consumer activity is slumping. Although Rome’s government bond yields fell after the summit, this is probably temporary.
Investors have good reason to be sceptical that the new Italian leader can resurrect his country’s economy. The latest evidence of that is his half-hearted labour reform package. On Wednesday afternoon, the Italian Parliament approved the progress of the new labour legislation. But the victory for Monti has a hollow melody. He intended to pass the reforms in a bid to help businesses (small as well as large) as part of his pro-growth strategy for the country. The changes were supposed to make it easier for firms to lay off workers during hard times. But now employees will have the power to oppose dismissals and appeal for compensation.
More widely, Monti’s approval rating amongst voters has more than halved according to polls. And local elections in May revealed that the political parties that back Monti are haemorrhaging support. Calls for elections to replace Monti, who was not elected by a democratic vote are gaining amplitude. Even former Prime Minister Berlusconi has added his own polemical chords to the rising cacophony of grumblings; he has said that he would be willing to serve as the economy minister in a new elected government led by his old party.
So where has it all gone off track for Monti?
Arguably, what Monti stands for and his persona have been a massive handicap. Firstly, he is an unelected technocrat. Moreover, Monti’s close ties to Europe add further barbed dimensions to his legitimacy crisis. He was the European Commissioner for nine years between 1995 and 2004. This has fed domestic suspicion that Monti has a tendency to see things from a European perspective before he considers Italian interests.
And although Monti is the antithesis to the flaunting vulgarity of the super-rich elite that embodies the Berlusconi era, he is elite nonetheless. This makes him particularly vulnerable to criticism by the country’s left wing, who argue that Monti does not recognise ordinary people’s suffering.
Monti is also elite in such a way that some Italians find more unnerving than Berlusconi. Berlusconi, although deeply unpopular in his final years in office, had popularity in the early days because he seemed to embody the Italian dream. He was a middle class boy who branched out into politics after his formidable successes as an entrepreneur, firstly in construction during the Italian economic boom in the 1960s, and then in building a media empire. His power and wealth, although despicable to many, at least appeared bare faced and unhidden.
In contrast, the elite status that Mario Monti represents is more genteel, more subtle and, ironically, more intimidating. He attended the Bocconi University in Milan, the most prestigious university in Italy and then Yale, and had a distinguished career in academia. He is also associated with the deeply resented banking elite, having been a consultant for Goldman Sachs and served on the board of several banks.
Monti has also been plagued by rumours that he is a Freemason. Perhaps some of the Italians who support these theories do so partly because they find Monti’s understated aura of power to be mysterious and an unsettling contrast to the crude flamboyance that they were so accustomed to under Berlusconi.
Overall, one could conclude that Italy’s unease with its leader in a way reflects the country’s growing despondency with the whole idea of Europe itself. Rejection of Monti and rejection of Europe is becoming increasingly conflated in political discourse to the point where it almost amounts to the same thing. Elite, educated, technocratic, cosmopolitan, stringent, utilitarian, not democratically elected, one could say that Monti himself carries the same arrogant and disciplinarian power symbols as the European apparatus and its bureaucrats.
Monti can, however, draw strength from the fact that many Italians are so fed up with the mainstream political parties which have failed them in the past that they feel he is still the least bad option. But this is hardly a solid endorsement of Monti’s leadership or his agenda. Unless he can cultivate an image which sets himself apart from his euro-technocrat caricature and convinces Italians that he truly represents them, he will fail in his quest.Tagged in: Brussels, eu, eurocrisis, eurozone, greece, ireland, Italy, leaders summit, Mario Monti, Portugal, Silvio Berlusconi, spain
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