Friday, November 25, 2011


Italy’s new prime minister is the antithesis of his predecessor. Not only are there no dirty jokes, orgies and multiple properties vaunted before visiting heads of state, there is almost no spin, no promises and no instant remedies. Mario Monti’s style reflects the other side of Milan and Italy as a whole as does the other Mario – Draghi who took over as head of the European Central Bank a fortnight before Monti became Prime Minister.

And his approval ratings suggest that Italians overwhelming support him. As he was winning his votes of confidence last week, 83.8% approved of him and 78.6% approved of his government compared to 22.4% for Berlusconi and 20.5% for his government at the end of October.

He and his ministers have said almost nothing in the week that they have held office. Most have not opened their mouths in public and the ones that have, said very little. Health minister, Renato Balduzzi appeared on Lilli Gruber’s “Otto e Mezzo”, the quietest and most respectable political talk show very different from the Coliseum act that most of the others put on; he did not say very much about what the Monti government would do. The only person who has been outspoken is the development and integration minister (a new post), Andrea Riccardi who reiterated President Napolitano’s statement that the children of immigrants born and brought up in Italy should have Italian citizenship, a controversial topic for the Northern League and some of the right but not part of the government plan.

For his part Monti is working on the supplementary budget measures that he hopes to pass before Christmas. He will need to do a lot more communicating to get it through parliament and a suffering public. His main fault so far has been to move very slowly and very quietly.

Almost certainly the local property tax on first houses (ICI) abolished by Berlusconi will be reinstated. This will take some of the pressure of city administrations which had to cut services or raise charges. There’s a good chance of a wealth tax although the centre-right has said that they oppose it. According to a Demos survey this week, most Italians expect and accept the property tax, the wealth tax and possibly an increase in income tax as long as they are progressive taxes and as long as they catch tax evaders. There is a problem of course in that “tax evasion” is something that only other do, by definition – if I pay a professional or an artisan in cash, that’s not evasion; it’s only the fat cats that evade… So if Monti really does clamp down on the grey economy, there will certainly be reactions.

He will also have to face the pension issue; the same survey showed that raising the pensionable age is very unpopular but will have to be done sooner or later. The other controversial issue is the reduction of job security, something which the unions and the left have made very clear is unacceptable. But it is an issue which Monti can finesse as employers can already lay off employees if the accounts show that the firm is at risk.
Whatever measures he does propose, they will have to navigate between the shoals of the uneasy coalition of centre-left and centre-right. The parties, especially the old centre-right majority have made it very clear that they could bring down the government whenever they want.

All the talk about a technocratic government being “undemocratic” dissolves when faced with the reality of parliamentary supremacy. It is true that Monti was not elected by the people but it is equally true that their representatives will have to accept whatever measures the government proposes.

This reality even allowed Monti a joke when he said in his speech asking the Chamber for their confidence “I would ask you not to refer to parliamentary democracy and the government’s complete reliance on Parliament with the electrical metaphor of ‘pulling the plug’; it is not clear whether we might be considered an electric razor or an artificial lung”. His government is actually both.

Of course the government is weak and vulnerable to whatever winds are blowing through Montecitorio but its very weakness combined with the storms howling outside Parliament paradoxically give Monti a good chance of surviving the full term simply because no one dares to take the responsibility of bringing him down. Both the big parties are internally divided which will also help Monti.

He started well enough in Brussels but that was predictable and it would have been a disaster if he hadn’t come home with at least the verbal the support of Merkozy. Even without concrete measures from Brussels, Italians are happy to see their Prime Minister be treated as an equal by the leaders of the two other big euro economies. If he can get the supplementary budget measures through before Christmas including at least some of the controversial items like property tax on first houses, wealth tax and some labour flexibility measure, then the rest will be (relatively) easy.

No comments: