Rome: Mario Monti, the economist sworn in on Wednesday as Italy’s prime minister, brings credentials from a decade as a European commissioner that his technocrat government will need as it faces a financial crisis threatening to spin out of control.
A sober and reserved figure who makes a stark contrast to his flamboyant predecessor Silvio Berlusconi, Monti expressed confidence that his government could calm markets that have come close to full scale panic as the euro zone debt crisis spreads.
Newly appointed Prime Minister of Italy Mario Monti. Photo: Reuters.
He made his name as the powerful competition commissioner who took on US corporate titans, blocking General Electric’s planned merger with rival Honeywell and imposing a record €497 million ($683 million) antitrust fine on software giant Microsoft.
His technical expertise, sharp intellect, diplomatic skills and his refusal to bow to intense lobbying made him a highly regarded commissioner, first in the internal markets portfolio and then in competition.
“He didn’t have a very Italian way of going about things,” recalls one former ambassador, who worked with Monti in Brussels and remembers him as a hard but reliable negotiating partner. “His nickname in those days was ‘The Italian Prussian´.”
Monti, 68, took the key economy and finance portfolio himself and named a team of 12 ministers, none of them politicians, to steer Italy through a crisis that has brought it to the brink of financial disaster.
He named Corrada Passera, head of Italy’s biggest retail bank Intesa Sanpaolo, as industry minister and Antonio Catricala, head of the antitrust agency, as his chief of staff.
The cabinet has a mix of experienced administrators and academics.
A similar technocrat government under former Bank of Italy official Lamberto Dini passed important reforms in 1995 and the hope of many outside Italy is that Monti, or some other independent outsider, could do the same.
With bond markets pushing Rome ever closer to the point where it would need an international bailout to manage its towering public debt, investors’ hopes have been pinned on a solution that would get past Italy’s dysfunctional politics.
A convinced free marketeer with close connections to the European and global policy-making elite, Monti has pledged to restore international credibility lost during the chaotic last year of the Berlusconi government.
He is chairman of the European branch of the Trilateral Commission, a body that brings together the power elites of the United States, Europe and Japan, and is a member of the secretive Bilderberg Group of business leaders and other European and North American “leading citizens”.
He was also, until recently, an adviser to two of the great symbols of world capitalism, Goldman Sachs and Coca Cola.
Monti has said he intends his government of technocrats to serve out the remaining term of the legislature until 2013 when new elections are due.
However as numerous politicians have pointed out over the past few days, the notion of a pure “technical government” above the daily fray is an illusion which is likely to be severely tested in the weeks and months ahead.
“He has a good feeling for how politics works but he isn’t a man for horse trading,” said one longtime associate.
Monti and his cabinet have a window of around 18 months to implement the kind of painful reforms to pensions, labour laws and the public sector that markets and Italy’s European partners are demanding.
But he will need to secure the support of a parliament which does not have a reputation for a high-minded sense of public responsibility over recent years. If he loses a confidence vote in parliament, elections could come early next year.
The main parties have agreed to back his government and he is expected to win a confidence vote in the Senate on Thursday and the lower house on Friday but the months ahead may be more difficult.
The regional pro-devolution Northern League has declared its opposition and former Interior Minister Roberto Maroni, a senior figure in the pro-devolution party, warned of problems ahead.
“The decisions which Monti will take must pass in parliament and I think that with such a heterogeneous majority he will have many problems,” he said.