Can Italy rebound?
Daniel Korski 5:50pm
I'm in Italy watching the bonfire of Silvio Berlusconi's vanities first hand. From the
ashes, most Italians hope a stronger nation will emerge. And for this reason, faith in former EU Commissioner Mario Monti, who gave his first statement to the nation last night, seems high. Italy
is not a nation on its knees, and despite the travails and troubles of the last decade, there is a sense of hope here. People want Italy to succeed and seem willing, for now, to pull together. They
also have a foundation upon which to build: brands, low private debt, and a solid banking system. Crucially, President Giorgo Napolitano has also indicated that a Monti administration will have at
least until April 2012, and possibly longer, to introduce reforms.
But the political classes are jockeying furiously to preserve their power and patronage. Every day, I'm told, somebody nobbles the PM-in-waiting to suggest this or that person for this or that ministerial office. In Rome, there is great fear that Milan will take over – that all of Professor Monti's contacts from Bocconi University and the Bourse in Milan will descend upon Rome, squeezing out the established powerbrokers.
And so they are fighting back. The threat of an early election seems exaggerated – both PdL and the Lega Nord know they would be slaughtered – but a new government will have to rely on their votes in parliament – alongside those of the left-wing DP – so they have some leverage left.
Understandably, all the talk of town is about who will be in the new government and whether Gianfranco Fini (who, along with Pier Casini, is emerging the best from the crisis) can retain his role as Speaker of the Lower House.
The real question, however, is what kind of reforms a Monti government will be able to push through. There seem to be two schools of thought. One is counselling a blitz of reforms, set off early to calm the markets and restore trust in Italy. The other is arguing for a slower but more fundamental set of reforms. Rumour has it that Monti is even planning to do what Guilano Amato did when he came to power – namely levy an emergency tax on everyone. But these may also have been set off to trip the new PM up.
What's becoming clear is that Monti has spent months preparing a plan and has given considerable thought to the required reforms. Though he is a convinced free marketer, with an impressive track record, he is also likely to try to balance taxes on the super-wealthy with labour market liberalisation. 'Social equity' is said to be one of his buzzwords. The hopes of not just one nation, but 17 EU nations rests on his ability to push through his plans and the reforms needed. And then organise elections.
Previous
whatawaste
November 14th, 2011 6:10pm Report this commentIn giving notice to the super-welathy on taxation will this not result - as in Greece - in a huge outflow of capital and wealth into neighbouring Switzerland? Surely what should be done is implement first then talk about it. Dumb and dumber, eat your heart out!
Dimoto
November 14th, 2011 6:18pm Report this commentVery, very naive Mr Korski - no doubt the sainted Mr Monti will even make the trains run on time.
If you don't believe in democracy, why don't you just say so ?
The mezzogiorno has been in a very bad way for years, so the "austerity" must fall mainly on the rich north.
Berlusconi was NOT a "buffoon", he is a smart and successful businessman who knows his country and it's limitations.
He was moving slowly because he knew the risks.
He was in power for the best part of 12 years, in a country famous for the revolving door.
It will end in tears.
daniel maris
November 14th, 2011 6:30pm Report this commentWell Italy still has lots of brilliant scientists and engineers.
I hope the new Italian government will back the development of cold fusion technology and make the Italian the energy providers of the world.
I would like to leave a link but can't.
Google on E cat, Rossi and Focardi.
Walter Ellis
November 14th, 2011 6:45pm Report this commentI don't know what to say. This is a perfectly fair and reasonable blog about Italy and the the euro. Shome mistake shurley.
Ian Walker
November 14th, 2011 6:48pm Report this commentMario Monti = Vidkun Quisling.
"And then organise elections" tells you all you need to know about the EU and it's sycophants like Korski - they genuinely hate the populace and it's irritating fondness for democracy.
Widmerpool
November 14th, 2011 6:59pm Report this comment@Daniel
"Italy is not a country on its knees"
Sorry Daniel I don't think Global Markets in general or China in particular agree!
Perhaps you should go and have re-education in how markets work in the real world you could try New York or Shanghai!
Don't swallow little Sarko's line in Cannes that the Euro Zone had re-invented the Global Market Economy[e.g Tobin Tax; Curbing Hedge Funds and similar dirigiste stuff]
They had an old saying in the City of London you can't fart against thunder!
Cynic
November 14th, 2011 7:15pm Report this comment"From the ashes, most Italians hope a stronger nation will emerge. And for this reason, faith in former EU Commissioner Mario Monti, who gave his first statement to the nation last night, seems high." Well, you've mentioned faith and hope - what about charity? I suppose that will be our money given to the IMF so they can give it to the EU to prop up Italy, but we won't be giving any money to prop up the euro, will it? E uno miraculo!
soprano
November 14th, 2011 7:38pm Report this comment"I'm in Italy..."
Why?
TomTom
November 14th, 2011 8:06pm Report this commentAdviser to Goldman Sachs, student of James Tobin, and founding member of the Spinelli Group - no wonder Korski loves him. The bloodsucking-vampire squid seems to get its people to pull levers wherever it can.
Italians haven't a clue what is in store for them; but they have the distinct advantage that with Debts equal to 25% EU GDP they can bring down the whole house of cards and Greece couldn't.
So if Monti upsets too many people he can take down Goldman Sachs and Morgan Stanley with the rest of the EU as Italians take to the streets
Verity
November 14th, 2011 8:22pm Report this commentCan Italy rebound? It will depend on how Merkell constitutes the cabinet.
Andy Leeds
November 14th, 2011 8:25pm Report this commentBut the fact remains that 'Merkozy' have engineered two 'coups' in as many weeks. Mario Monti may well be a fine chap, but he is their 'Gauleiter' and has no democratic mandate. Berlusconi, far all his faults and current unpopularity, was the choice of the Italian people. Like in Greece we should think twice before we set democratically elected governments at nought.
Widmerpool
November 14th, 2011 8:49pm Report this commentThis site seems to have become a bit constipated! No postings appearing within about the last couple of hours. Is young Daniel off being re-educated? Ha Ha
BTW I see Boy George has luanched a ferrocious attack on the Tobin Tax in the Standard tonight I wonder what the Frankfurt Gang of 8 and the new Italian PM make of this? Circle the wagons a bit tighter?
Boudic ca
November 14th, 2011 8:59pm Report this commentMr Monti's appointment is the result of an EU Coup d'Etat.
The Italians should resist this overthrow of a democratically elected Prime Minister and I hope they do.
The EU autocracy is clearly demonstrating its credentials as the descendent of the Soviet Union. I hope they face the same fate as Ceascescau.
Walter Ellis
November 14th, 2011 9:01pm Report this comment@ Ian Walker
To compare Mario Monti to a WWII collaborator represents a new low.
Dimoto
November 14th, 2011 10:39pm Report this commentWalter Ellis:
Fair enough, but Quisling also thought he was doing the best he could for Norway.
(he won several international awards for charitable work and a CBE).
Ian Walker
November 14th, 2011 11:21pm Report this commentWalter, if you can arrange a coup with a suitable puppet, it saves an awful lot of mucking around with armies.
It's a war on democracy, using banks instead of tanks
Augustus
November 14th, 2011 11:50pm Report this commentThe Italian 'dolce vita' has many sides; the role of the mafia, the embedded corruption, the bureaucracy, the meagre economic growth, all well known. But the reality is even worse. It's a surprise that Italy can even function at all. The country is 87th on the list of the most competitive countries. Politics is rotten to the core, with enormous privileges and full of rules making life as complicated as possible. An average court case takes 1,200 days and the country has 207,000 lawyers compared to France's 47,000. Anyone who knows this also knows how difficult it will be for the divinely declared and appointed Mario Monti to put things right.
Herbert Thornton
November 15th, 2011 12:35am Report this commentI'm not forecasting where it will all end for Italy - but there's one historical parallel that I suggest is worth looking at.
Has anybody noticed that Mario Monti's background, personality and qualifications seem remarkably like those of Portugal's Dr. Salazar?
fergus pickering
November 15th, 2011 3:02am Report this commentMy wife tells me - I don't know where she got this from - that the biggest buyers of property in London lately have been Greeks. Baling out?
Minekiller
November 15th, 2011 8:38am Report this commentThe Germans and their Vichy allies have now effected regime change in two European countries and not a shot fired or a tank rolled over a border. Napoleon and Adolf would be green with envy!!
TomTom
November 15th, 2011 8:43am Report this commentFergus Pickering, your wife is correct. German newspapers report London as the safe haven for Greek capital flight - and New York.
BTW. Which former Goldman Sachs banker will be parachuted in to restructure France ? It is currently rated 15th out of 17 EuroZone countries for having its budgets under control
TomTom
November 15th, 2011 8:49am Report this commentAugustus;
Spain Lawyers:114,143 Pop: 45MM P/L:395
Italy Lawyers:121,380 Pop: 59MM P/L:488
UK Lawyers:151,043 Pop: 61MM P/L401
Germany Lawyers:138,679 Pop: 82MM P/L: 593
France Lawyers:45,686 Pop: 64MM P/L: 1,403
Funny how Britain has more lawyers than Germany or France or Italy....but we have an Internal Empire to administer
Liberty
November 15th, 2011 9:31am Report this commentIs this the beginning of the'post-democratic' world that Mandelson spoke of?
Kevin
November 15th, 2011 9:42am Report this comment"The hopes of not just one nation, but 17 EU nations rests on his ability to push through his plans and the reforms needed. And then organise elections."
And will voters be allowed to democratically reject Monti's policies, or have Italian elections just become as efficacious as EU referenda?
This line of argument is shocking given the justification of regime change in Libya.
Speaking of which, how is the investigation going into the killing of Gaddafi?
Fex Urbis
November 15th, 2011 9:50am Report this comment@whatawaste
London property has long been a favoured destination of dodgy Italian cash, they've been buying tons of stuff over the last few years.
MI
November 15th, 2011 9:53am Report this commentSome good Dempsterisms here: "I'm told" (by whom?)
Is this a holiday, or did some of your Euro chums pay for you to pop over so you can dispense wisdom to the new "Government"?
Nicholas Hallam
November 15th, 2011 11:00am Report this commentIn the unlikely event that the British PM should ever do something to displease his EU associates and their friends at the IMF, who could we expect to find appointed local Satrap here? Chris Patten? Peter Mandelson? Or will they go the whole hog and dig up Ted Heath?
Dimoto
November 15th, 2011 11:37am Report this commentTom Tom:
Interesting stats. What qualifies as being a "lawyer" ? Huge numbers of our young people (especially ethnic minorities), seem to want to do law degrees.
How many are unemployed ?
Or is it the progressive Americanisation of legal-UK ?
Hexhamgeezer
November 15th, 2011 11:38am Report this commentdaniel maris @ 6:30pm
In the meantime do we still forge ahead with thousands of subsidised bird scramblers?
ROJ
November 15th, 2011 12:03pm Report this commentCan Italy rebound? Er, no. Not without a devaluation, like it always used to do.
daniel maris
November 15th, 2011 6:25pm Report this commentHexhamgeezers -
If it's good enough for the Germans, with the most successful EU economy, it's good enough for me. Aim for 100% green energy.
TomTom
November 15th, 2011 8:08pm Report this commentDimoto, the two best degrees for ROI for females are Law and Medicine...funnily enough the expansion in University places is Female.
Cynic
November 15th, 2011 11:55pm Report this comment@Widmerpool "Ha Ha
BTW I see Boy George has luanched a ferrocious attack on the Tobin Tax in the Standard tonight I wonder what the Frankfurt Gang of 8 and the new Italian PM make of this? Circle the wagons a bit tighter?" The Axis powers - sorry, I mean allies of die Fuehrerin - have claimed, according to no less a rag than the Guardian, that she would not allow the UK to "get away" with its refusal to back a Tobin Tax. There you have it, folks. Our elected representatives will be overridden by a foreigner and a tax imposed on us against our will. Come back, Magna Carta, all is forgiven!
Hexhamgeezer
November 16th, 2011 3:48pm Report this commentdaniel maris @ 15th 6:25pm
Successful German economies long predate the EUSSR or bird scramblers.
Just like successful US economies long predate (proven and economic) shale, but I know which route I'd choose. Unless, of course, your E-cat chaps allow the world to examine their perpetual motion machine.
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