Italy Must Become A ‘Predictable’ Country – Prime Minister Mario Monti Speaks
Following the volatile reign of Silvio Berlusconi, the longtime European “technocrat” and economics professor Mario Monti has achieved surprising consensus both inside and outside of Italy. But can he make it last if he doesn't stick around?
ROME - Italy must become a predictable country. That is the concept Italian Prime Minister Mario Monti identifies as the key for the country's economic recovery and long-term credibility.
More than four months after his arrival as head of "technical" government, and fresh from a whirlwind tour of Asia, Monti sat down for an extensive interview with La Stampa at the official prime minister's residency, Palazzo Chigi.
Usually, being predictable is not considered a compliment. But Monti's trademark is normality – it's part of why he was chosen to replace the embattled and often controversial Silvio Berlusconi.
Italy must become a normal country, the former professor explains, in order to attract investors and achieve growth.
Monti's desk in Rome is overflowing with print outs of reports and competitiveness ratings of his troubled country. His mission is nothing short of changing Italy's image across the world.
LA STAMPA: You are just back from Asia, after earlier trips to the United States and the major European capitals. What was the reaction in these places to the changes taking place in Italy?
MARIO MONTI: I was particularly struck seeing how the Chinese president, and the Indian and Pakistani prime ministers were so well informed about our actions to contain the deficit and about how quickly we approved the first series of reforms. There is a clear feeling that Italy can make a difference on the financial health of the euro zone.
In this new and evolving world, what is Italy missing in order to be competitive and to attract foreign investments?
I would say that we miss a methodical and long-term attention to the country's image. Not in a superficial way, but in order to make the major investing countries and their companies understand how Italy works, and to make them think about our economic policy as predictable and stable. It is important that the international economic and political elite sees Italy as an understandable and predictable reality, which - despite its complexity - is similar to them.
In concrete terms, what do we have to do?
We need to create a favorable environment for investment. Then, progress has to be achieved in security and the fight against crime. There is also the reduction of the bureaucracy, a more efficient justice system, the lack of infrastructures and the crucial point of having predictable rules. If we could achieve this… we would give a signal of confidence abroad. This would mean that Italy is really changing, beyond just the short term of this peculiar (technical) government.
You are pointing out how the rest of the world is asking Italy to be predictable, but at the same time you are mentioning that this is a short-term government. You know that there is a huge question mark over what will happen one year from now. Who can guarantee that this virtuous behavior won't end?
No one can guarantee it. But I'm confident that it won't happen. If these parties have been able to agree, and to find common ground even without the benefit of being at the center of the attention, then in a new phase of political governments, when they have the responsibility to govern with their own leaders, the goal to achieve a positive outcome will be even stronger.
You speak about the importance of cultural changes for the country...
In this phase we have seen how Italians react when they are told, in a straightforward way, that it is necessary to do some things that have some real consequences. Every time that I think about the changes in society and politics, I am ever more convinced that the virtuous behavior won't stop. It will be beautiful to see all of this from the outside.
Why must Italy have such a challenging goal?
I didn't set the goal of a balanced budget by 2013. It was set by Prime Minister Berlusconi during this last turbulent summer, to show the level of Italian commitment. When I arrived here, I was aware that it was a much more ambitious goal than that of other European countries. But we decided that renegotiating it was not advisable, because it would have caused a loss of credibility.
Aren't you concerned by the country's lack of growth?
We have been working to avoid the worst. We've avoided winding up like Greece. Now, a growth plan requires more time. I understand that it would be great to have economic growth, not just for the citizens' wealth and to boost employment, but also because it will make our market more attractive for foreign companies.
Unemployment is rising, especially among young people. There is a decrease of expenditure, due to the increasing of taxes and inflation. When will we see a positive effect of the reforms?
For a long time, the much needed structural reforms were not done. Every liberalization was seen as impossible or unrealistic. With the pensions reform, we erased a serious and long-term element of imbalance.
There's nothing we can do in the short term?
For sure we cannot ignore the social suffering, and we are planning some actions. But there isn't much room for maneuver, and the actions will be selective. It is no longer possible to run deficits in public spending.
In the meantime we are seeing terrible things, such as business men and owners of small companies committing suicide...
These things are dramatic. Even in Greece the number of suicides has increased. The only possible and serious answer is to cure and restart the country.
How is your relationship with Silvio Berlusconi?
After a normal initial moment of adaptation to a new situation, my predecessor has shown an important and continuous support. I keep him informed about the big international issues and I ask for his advice.
Personally, what was the most positive moment of these past few months?
When I introduced for the first time the program to the Parliament and I saw that I held my own in this totally new situation. I understood that, even as a stranger, I would be able to try to work in this world, for a short amount of time.
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