Cause and Effect in European Politics and Law

Monti's Agenda - Can Italy Be Changed?

Adelina Marini, January 3, 2013

After a long, even too long hesitation, Mario Monti has finally decided to dive into Italian politics. His ambition is to change it by taking it out from the status quo of the 1990s to the realities of the 21st century. The Italian Prime Minister has been installed in the autumn of 2011 under pressure from EU, without elections, with the task to prevent Italy from becoming the first big eurozone country that needs rescue, thus practically ruining the zone of the common currency which back then did not have the necessary tools to handle big countries. A year later, however, Silvio Berlusconi, who withdrew in a rather humiliating way from the position of a PM and symbol of Italian politics, decided to end his party's support for Mario Monti's technocratic government that leading to elections. Mr Berlusconi, against the backdrop of ongoing family scandals and his engagement to a woman 50 years younger than him, said he was returning to politics with the intention to win.

The former rector of the Bocconi university, Mario Monti, needed almost a month to decide what to do. He got a silent approval in Brussels, the support of the Vatican and in spite of the tough austerity measures, he enjoys the confidence of many Italian citizens, foreign investors and the financial markets. Monti had to choose whether to retire from politics, hoping that the very successful year during which he completed the task and brought Italy back on the right track could secure him a less stressful position somewhere in the EU hierarchy where there will be changes after the 2014 European elections, or to respond to the rare chance that has opened for a radical change of Italian politics.

Monti's agenda

And right when the resolve of the former European commissioner was starting to eat away his reserve of good points, he decided to run as a leader of a group of centrist parties that supported his platform called Monti's Agenda (l'Agenda Monti). Yet in the first minutes after the announcement of his decision, Berlusconi threw the gauntlet and the battle began. Mario Monti explains his decision saying that the parliamentary elections in February will be a tipping point. Then the Italians will have to decide whether Italy will continue to be a big country at the centre of European and international politics or will it marginalise and isolate itself due to populism from in left and right in Italian politics. He explains also that the agenda he proposes is neither centrist, nor modest. It is about a new political force that will be modest in tone, but not in action. That political force will be a reformist one, Monti says.

The Monti's pre-election platform [in Italian] is 25 pages long and bears the ambitious title "To change Italy, to reform Europe". It contains four main points: Italy, Europe; Path to Growth; Building Social Market Economy; and may be the most important, ambitious and tough point - Change of Mentality, Change of Behaviour. As a person who reads a lot of European documents, what immediately drew my attention was that Monti's agenda is thoroughly sodden by the European agenda. He puts Europe on the first place and winds everything else around it. To explain that with his past of a European civil servant would be too simple to do. In fact, the motives in the agenda speak for themselves.

The choice for or against Europe is a choice whether Europe will split fundamentally between the member states and the political forces. Leading should be those forces that will make the EU capable of pursuing in an effective manner the economic crisis and the social woes, following the model of "social market economy", the platform reads. An accent is put on democratic control when pursuing that type of policy. "Italy should fight for a more communal and less intergovernmental Europe, more united and at less speeds, more democratic and less distant from the citizens", because the EU is not something that is above or outside the member states. The Union's policies are the result of a mix of common and national interests. "We have to accept the fact that our choice of policies and economy are being watched and assessed attentively by the rest of the member states because the decisions we take at national level have an impact on the other countries with which we are closely integrated", the document says.

But in order for a country to be successful, it should not rely only on its interconnectedness in the EU but in today's more and more globalised world. That is why, much ahead in the agenda are put Italy's relations with the rest of the world but in the context of the common foreign policy. According to Monti's agenda, Italy should enhance its positions in the EU and the relations with those member states that focus on the trans-Atlantic links.

Growth cannot be achieved through public debt, is a key message in the platform of Mario Monti. With a public debt of over 120% of GDP, it cannot seriously be thought that growth can be created by generating more debt. Financing public debt costs the Italians 75 billion euros in interest rates every year, which is around 5% of GDP. In spite of the many criticisms that might be justified in some aspects, the document reads, it should be recalled that good fiscal discipline is a condition for trust. That is why the austerity programme should continue with the objective as of the beginning of 2015 to start reducing the public debt by one twentieth every year until it reaches the goal of 60% of the gross domestic product. All revenues should be directed at achieving that goal, is written in Monti's agenda.

There it is promised that in the framework of the first 100 days of the new government, consultations will begin to identify the 100 administrative procedures that are absolutely necessary to be eliminated or reduced. Absolute transparency should also be introduced in the public administration, following the American model (Freedom of Information Act). The squandering of European structural funds, which are a unique possibility for investment in growth in the regions, is scandalous and Italy can no longer afford that, is another message in Mario Monti's agenda. Investments in education, digital economy and in jobs creation are the other priorities, outlined in the platform. Tax burden relief will be sought over labour and business, but this will only be possible if the austerity programme continued.

And regarding the change of mentality and behaviour, that will be expressed via less individualism and more collegiality. Italy has to say "basta" to the culture of excuses - a culture that makes the country a loser. The language of truth has to be spoken, without hiding the problems or sweeping them under the carpet, without fear of difficult decisions, is another thing the Italians will be called upon to change in themselves if they vote for Monti.

He intends to continue the battle with corruption, tax evasion and submerged economy. In his platform, it is written that Italy holds a not an enviable position in the international classifications on these indicators. In 2012, however, a deep battle was held against tax evasion which led to additional 13 billion euros in the treasury. "Whoever cheats the fisc, puts his hand in the state's pocket and reduces the services that it offers to all the citizens", is the motivation in Monti's platform.

Berlusconi and family values

While Mario Monti's decision whether to set out on the slippery and steep path of politics was awaited, especially given that he has to stand against the champion of the past decade, Silvio Berlusconi kept the newspapers busy as well, mainly with information about the sum he will pay to his ex-wife every month or the engagement with a decades younger woman. The latest idea of the extravagant 76-year old media magnate is to establish a parliamentary inquiry committee to investigate the international "plot" that took him down in November 2011. On his special election website, titled "Forza, Silvio!", he is quoted saying that he had read Monti's agenda but he did not see in it not even one topic from real life and family.

"Plots against Italy? We are serious grownups. Berlusconi has changed this week, resorting to quite inappropriate weapons like, for example, to claim that in my proposals there are no family values, which speaks for itself", Premier Monti replied. According to the prime minster, Mr Berlusconi is constantly changing his positions. Until recently he was offering Monti to lead the moderate political forces, which was not that long ago, the premier added. Recently he said that the government caused many disasters in the country, but before that he was claiming that the technocratic government had done everything that was possible to be done. "I hope voters are less confused than me", Monti said. But Berlusconi promises to his voters to take the opposite direction to Mario Monti's. "We will fight that austerity policy, proposed by Europe", he vowed.

Beyond politics

Italy is among the 14 EU member states (Bulgaria including) that this year, too, triggered the alert mechanism, being part of the macro-economic imbalances of the EU. The procedure has been introduced as part of the six-pack of legislative acts, aimed at enhancing the Union's economic governance. According to the European Commission analysis, Italy is experiencing significant imbalances, especially in terms of exports, competitiveness and the implications of the huge public debt. The country has lost market share abroad and the government debt is huge. Weak productivity remains a major obstacle for the durable improvement of Italian competitiveness, the Commission reports. The recently introduced structural reforms, aimed at boosting competitiveness and at the labour market, are expected to restore productivity growth in the mid-term. Wages, however, are still not sufficiently adequate to the levels of productivity.

The huge debt (over 120% of the gross domestic product) remains the biggest burden for the Italian economy, especially against the backdrop of the perspectives for slow growth. Because of the significant fragmentation of the financial market, the interest rates are relatively high, associated mainly with the high government risk, which makes the funding of the private sector especially hard. The good news is, though, that private sector indebtedness is relatively contained in Italy.

The parliamentary elections in the country will take place on February 24-25. By then the Italians will have to make the tough choice between the status quo and the new, albeit now well known, political behaviour of Professor Monti. Besides, it is high time that we understand that the elections in Italy are not just national. The outcome of the voting would have impact on all of us in the EU.