Mario Monti has restored Italy’s good name in Europe. Now he wants help

Mario Monti is the best and most qualified Prime Minister Italy has had in several decades. A rare show of those many good and smart Italians that that work hard with modesty and integrity for the better of many, despite all odds.

Like the Republic's President Giorgio Napolitano he is one of the two heroes of the troubled Italy of the last ten years.

The only sad note is that he and is government are time limited, and the miraculous however surreal truce between the main political players will not last for long.

After Mr Monti's time, another bitter electoral campaign will elect many politicians unfit for their important role, and a new government may undo in a a couple months what the previous PM did in a year, reestablish corporation privileges, destroy any good reputation and restoration processes in place.

In fact there are no good leaders in sight in any of the political sides to come after Mr Monti and his government. Let's only hope his and Mr Napolitano's efforts will achieve as much as possible during this year, and the future will start look less grim worldwide afterwards.

It seems The Economist has fallen in love with Mr. Monti since he started to advocate liberal reforms and eurobonds.

And old favorite adjectives such as "unelected", "undemocratic", "pushed by EU" disappeared fast from the articles.

As seen from Italy: I am quite afraid you are right. Mr Monti does depend from each single political party. Mr. Berlusconi and all other leaders are aware that he is going to adopt those reforms we all longed for since so many years - but today financial mess is forcing this through a very painful path.
Political leaders will let Mr. Monti work just until they believe the Italian public fears Italy default.
My only hope is that EU will not leave Mr. Monti alone.

...finally somebody that know the matter he is speaking about and in 3 languages !!! Finally somebody that may expose a dream and his cost end where to find money...!!! ...but the people in Parliament is the same....that approved the worse government in 150 years of ors republican history !!!

Answers:
- Berlusconi's party is the largest party supporting the government; without Berlusconi there would be no Monti government.
- Unfortunately Monti is not a true reformer and his defense of the status quo goes perfectly well with most of Berlusconi's party, which gains a lot of its votes from the South. Of course Northerners and libertarians in Berlusconi's party are not pleased by Monti, but they are not determinant.

Stop with this nonsense - Berlusconi stepped down and Napoletano paved the way for Monti to become appointed and he is probably the best Leader Italy has ever had. Monti has absolutely nothing to do with being align to the financial interests of London Please!

The questions asked by German_Econ seem the right ones. And the obvious truth appears to be that Mr Monti's government will fall the moment Mr Berlusconi effectively withdraws his parliamentary support. So the real question is if, how and when that will happen.

Now, experience shows that Mr B's moves are always grounded on opinion polls. So the most likely answer is perhaps that Mr B will not cut down Mr M until polls do not give Mr B a sporting chance to win the ensuing general election. Right now, that chance is not there for three reasons: first, support for both Mr B and his party is at an historical low; second, Mr B would anyway need an electoral alliance with the Northern League, which as things stand now seems not very likely; it's true that this might change if Mr B ditched Mr M, but the third fact is that Mr M's own popularity is still surprisingly high, and so an open move against him might actually worsen Mr B's already dismal ratings. Taken together, these factors militate for Mr M remaining in power until the spring of 2013.

However, another scenario is also possible. Some of Mr M's proposed reforms are hitting hard against lobbies of Mr B's traditional voters, so that continued support for Mr M could by itself damage even more Mr B's popularity. Mr B is perfectly aware of this, and is currently trying to reduce the threat by loudly qualifying his parliamentary support to the government. Should this soon lead to open obstruction of some crucial liberalizing measures, Mr M might feel forced to resign. Alternatively, Mr B might himself feel forced to kill directly the government out of sheer desperation, to stop the rot and prevent the breaking up of his own parliamentary group, even at the cost of a probable electoral defeat.

Finally, there are indications that Mr B's preferred outcome would actually be a still different one, in which an all-out clash with trade unions and the parliamentary left on labour-market reform would force politically Mr M's resignation, even if in that case he might still keep a wafer-thin parliamentary majority, just thanks to Mr B.

It has been argued that keeping up the international pressure on Italy — in the shape of high borrowing costs — will help Italians concentrate minds on their need for reforms, thus reducing the probabilities of the second and third scenarios mentioned above. However, Mr B is already loudly using the relentless spread on Italy's debt since he left office as evidence that the debt crisis started in early August was not really his fault. And Mr M himself has keenly advocated lower interest rates in his dealings with Italy's EU partners. So this is at best a double-edged argument.

All in all, the least damaging scenario is clearly the first one. To promote it, Mr M should probably take on Italy's lobbies — including trade unions — one by one, rather than all together in single swipe. This would of course reduce the pace of reforms. Yet reforming Italy is going to be a long-run business anyway, whose effects will not be seen for many years to come.

Monti is the BEST

Italy must finally declare war to mafia state.
Mafiosi are well known (Ask Berlusconi).
Once war is formally declared, Italy army can legally use real ammunition against mafia state.
Once Mafia state has surrender (or all killed), Italian government can recover many hundred billions EUR!
So Italian government can pay all debts back!
There is no other legal way to get rid of the mafia state then declaring war!
Because many lawyers are part of italian mafia state!
Mafia state MUST disappear!
Once mafia state has disappeared, Mario Monti can ask for money. Not before!

The Economist is wrong in putting its weight on sofetning the burden for Italy: a harsh budget is not an achievement when is just what is needed to avoid bankruptcy. As for the reforms, none is yet in sight. Indeed Italy does need pain a bit longer, otherwise no fundamental change will ensue. The article rightly describes some reactions as " violent": how soft can you afford to be confronting violence? Mrs Merkel may have many policy shortcomings but she is better than you at judging people. And Mr Sarkozy seems to remind better than you do that the French Rvolution did not happen in Rome. Taxi drivers included.

Mario Monti is so aligned with the financial interest of London, that had he not been elected by a parliament, we could think he has been appointed by the financial district of London.

On the political front: let’s face it, nobody has a clue. What Berlusconi might be doing depends on too many variables: whether he will get slammed in court (the most important criminal case is expected to come up soon), whether the allies of the Northern League will fall apart due to infighting (things are taking a pretty nasty turn, it seems), whether the Christian Democrats are able to slowly undermine his power base (which depends inter alia on the above), etc.

As for Monti’s ability to go through with bold structural reforms, he is taking flak from various quarters, but on the whole he should be able to bring them home. But I really believe that there is a serious misunderstanding regarding the possible outcomes of these reforms. Structural reforms are being sold as the only way to revitalize the economy, but this does not make much sense, at least in the short term. I’m not saying that what is being proposed (eliminating minimum fees for lawyers, increasing the number of pharmacies and notaries, carving out the gas distribution network from ENI, etc.) is wrong, on the contrary. As an old fashioned liberal (in the European continental sense of the expression), I’ve been preaching for these things since I was in high school. But the ugly truth is that none of these measures will make any difference in terms of GDP growth in the coming 12 to 24 months.

The real problem is that Italian companies now are really feeling the heat. I live in Bologna, the heartland of Italian mechanical engineering: out of 5 companies, (i) 1 is doing quite well, it’s operating on a global scale (but the brain is still here), has good products, a decent management and fine technical kids (I meet them on the 06:20 flight to Frankfurt, where they catch the connection for China, Colombia or the US, where they go to install some piece of machinery); (ii) 2 companies are doomed: they were never real ‘enterprises’ but just subcontractors, with some technical skills but no vision and no entrepreneurial spirit (which is something different from being just after money ..). They would have gone belly up anyhow sooner or later, and the crisis is ‘simply’ accelerating the process (which is not totally negative, remember ‘creative destruction’?); (iii) the real problem are the remaining 2 companies, which were not really top of their league, but still could find their niche here and there, survive, employ people and pay their bills. But now, with demand for investment goods being next to nihil in ‘easy’ markets (Italy, Spain, I would also say France) and the € too strong to compete on price in the world market, these two companies are facing huge problems. And assuming that they have the guts to restructure (and the necessary money, which may mean to sell the cherished country house..), it takes time to create new products, find decent mangers and put them in charge, etc.

So, to make it short: structural reforms take time to deploy their effects, and the more so in environments with inherently limited capabilities. Don’t be fooled by Italian ingenuity and flexibility: it’s not enough, and what matters in this phase of economic evolution – ability to manage complex organizations – it’s exactly what Italians have been structurally bad at. No question, they must shape up, but cannot do it overnight. Under these conditions, in order to go back to growth, you can’t count just on the liberalization of taxis et similia, you need a shock on the demand side: as government spending is out of question (and, anyway, it wouldn’t work as it did in the good old days: given the high share of imports, the domestic multiplier is low..), the only thing that could alleviate the situation is a decline in the exchange rate. With an € at par with the US$ (compared with 1.3 now and 1.5 a few months ago), the story would be a bit different, and the word growth would start making sense again. Will it happen? Only God (maybe) knows. But, in my humble opinion, this is exactly what Draghi (the only one left within the EU who has both some real decision power and the will to exert it) will be trying to achieve (not because he’s Italian, but because it is the only sensible thing to do).

The alternative is a long period of no growth, with increased tax pressure and bigger spending cuts to pay the interests on debt. Can it work? I’m not too worried about the family sector: Italians are fairly resilient in this respect: they own their houses (mostly fully repaid, no fancy 110% loans here..) and have cash reserves. Certainly nobody would be happy, but the medicine can be swallowed for a while. But if the crisis were really so bad to undermine the industrial base (see my argument above), then something nasty would happen. No government (not even Monti’s, who would be gone anyway by that time), would be willing to accept this, and the only way out would be to exit the EZ,. A disaster, but not only for Italy.

Sorry for being so long. Have a good night. RZ

I'm just saying that Berlusconi is not the evil of Italian politics. Monti should be worried by all the parties which support him, notably the Democrats (who are not keen on market economics and who are heavily influenced by trade unions) and Casini's Christian Democrats (whose base of support resides in the South and in the privileged classes). Berlusconi has not been the solution, but it was neither the problem.
Monti has just short-term goals: if he were really interested in saving Italy, he would tackle the South and the vested interests. Of course, he won't do that: all the three big parties supporting him would instantly desert his government.
An election could be a solution, but a short-term one too. The real problem is that Italy is a very weak country, with a huge North-South divide.

Mr. Monti has the support of thinking people everywhere. I hope he, like Adlai Stevenson years ago, will not be forced to quip that it is likely to prove insufficient.

"But he would like to see the Germans do more to liberalise their own services, to bolster the EU’s single market"
I would also like to see that, I hope it's going to happen

Maybe an Italian can help me out with these questions:
- How much does Mr. Monti still depend on Berlusconi's or his party's will?
- Since he wants to implement important structural reforms that might hurt e.g. Berlusconi's party or certain lobbies, how likely is it that he would be replaced or at least not supported in parliament when he trys to implement such reforms and if there is no market pressure (low interest rates) any longer. Is the market pressure not supporting Monti, strengthening his position against lobbies that don't want to give up their privileges?

Monti probably the best Leader Italy has ever had so keep your doom mongering to your self and when you can boost a CV like his – maybe than you may have a right to share your negative view until then watch and learn. Monti: Minister of Economy and Finance; he took office in November 2011. He served as a European Commissioner from 1995 to 2004, with responsibility for the Internal Market, Services, Customs and Taxation from 1995 to 1999 and then for Competition from 1999 to 2004. Monti has also been Rector and President of Bocconi University in Milan. ETC ECT and so on

Before we go into ecstasies about the Good Professor, may we please recognize that he has barely started his term of office and that things could quite suddenly go very badly wrong for him.

What we have had so far here in Italy is promises of austerity mainly in the form of higher property taxes and a less generous pension deal for the retired. The details are still rather unclear because there has been much changing of mind by the cabinet - in fact daily changing of mind is emerging as one of the cabinet's few distinctive characteristics.

On the growth-inducing side, we have had promises - again not as specific as they ought to be - about deregulating the pharmacies and the taxi businesses, neither of which can be described as an absolutely key sector of the Italian economy. As regards the more fundamental issues, there has been much inconclusive wrangling with the unions over labour legislation, and the wrangling is continuing day by day.

Monti and his colleagues are in a difficult position because they were parachuted into power and do not enjoy a popular mandate. The reason why many Italians are sympathetic towards Monti is that he is not Berlusconi, but as the antics of Mr B fade from memory, and as and when the austerity measures begin to bite, popular resentment of the new regime will very likely grow.

The main parties in parliament, hitherto quiescent under Monti, give the impression of waiting for popular opinion to turn. Berlusconi, who hasn't looked happier for years, is still supported by his faithful followers, and a resurrected alliance between Mr B's lot and the Northern League is still on the cards, for all the League's protestations to the contrary. The centre left, divided and demoralized and rather weakly led, support Monti because he's not Berlusconi.

None of this is reassuring for the Professor's ardent disciples. Frightful though the thought may be, Berlusconi has always been highly adroit in opposition, and sooner or later he will make his move. At the right time, a well-organized vote in parliament could smartly remove the carpet upon which the Professor and his cabinet are standing, and Italy could be back to square one. And just imagine what the return of Mr B would do to the euro.......

Yesterday European technocrats were lousy people, today they are not that bad after all, tomorrow Ms Merkel invited by The Economist to have a cup of tea?

How can you say that Monti is the best leader Italy has ever had. Monti is no leader at all. A leader has followers behind him. He has nobody behind him. He is only a premier appointed by Napolitano who acted on Merkel's order. He is a kind of a puppet premier and nothing else. He is a nobody. Considering him as a good premier is another mistake. He was Goldman Sachs's adviser and responsible for the deluge of junk funds which so much damage caused among the people. If you judge a person for his past he cannot be a good premier. You cannot appoint a wolf as a shepard or a goat as a gardner.

I think if Europe have a hope it will be through this man!