November 12, 2011

Let Super-Mario Try (and Let's Keep Our Fingers Crossed)

Mario Monti
Joking about the speculation on his own future, Mario Monti, who—like his fellow countrymen Mario Draghi and Manchester City soccer player Mario Balotelli—is nicknamed “Super-Mario,”  said he had been questioned last Wednesday by a fellow passenger flying to Berlin from Milan as to whether he was on the right airplane. Once arrived in Berlin, speaking at a symposium to commemorate the late Lord Dahrendorf, former director of the London School of Economics, Monti engaged in a vigorous defense of the euro as a common European currency, praised Germany for exporting its focus on monetary and fiscal stability throughout the eurozone, paid tribute to the Franco-German partnership in Europe, and said that closer involvement of Italy would be in the common interest, “if Italy had not in the past few years completely expelled himself.” Italy, in his view, is still benefiting from being in the euro, “because the benefits of belonging are not just flows per month or per year but rather a legacy over time.” This country, he added, “is at the core of Europe. Politically and historically, Italy cannot ignore its responsibility as a founder member state of the European Union.” Yet, he concluded, “I will not deny we have enormous work to do.” This, in a nutshell, is his Weltanschauung, the “worldview”—sense of humor included—of the man who is going to become Italy’s prime minister.

A Yale-trained and widely respected economist, professor at Milan’s Bocconi University and former European Commissioner, Monti—like the new head of the ECB Mario Draghi!—has also worked as an international advisor to Goldman Sachs. “He has an international profile that no one can deny,” said Foreign Minister Franco Frattini, who is one of his ardent fans. But his most prominent supporter is Giorgio Napolitano, Italy’s head of state, who appointed Mario Monti a senator for life on Wednesday, in a move widely interpreted by the Italian media as a sign he would ask him to try to form a government as soon as Berlusconi goes. Berlusconi, in turn, under pressure from markets and leading members of the People of Liberty party, who had warned him that they would not follow him in pushing for early elections, changed his position on Thursday on the possibility of supporting an emergency government led by Monti—the choice of investors, and Italy’s biggest opposition party, the Democratic party—and decided not to block him.

Mario Monti and Italy's head of state Giorgio Napolitano
As a result, the outcome will be a “national unity” (emergency) government headed by Monti, despite the opposition of Berlusconi’s key ally, the Northern League, of some prominent members of Berlusconi’s People of Freedom party, such as Welfare minister Maurizio Sacconi, and of influential opinion leaders, such as Giuliano Ferrara, editor of Il Foglio newspaper and one of Berlusconi’s most trusted advisors. Before that can happen, however, Italy’s two houses of parliament need to approve a massive economic package designed to cut public debt and stimulate growth. Once that happens—the Senate has already approved the package, with the abstention of the main opposition Democratic Party, and the House of Representatives is expected to approve it today—Berlusconi will resign, paving the way for the new government.

With that being said, we should discuss (at least) three important points. First, whether or not this whole thing is politically acceptable by the voters, who will be totally ignored by the political establishment. The answer is obviously no, but it’s far too easy to argue that, given the state of the economy and the failure of Berlusconi and his coalition, there is no viable alternative. Second, whether or not an interim government lead by this cool, calm and collected man, who couldn’t be more different from his predecessor, “will have the latitude to introduce sweeping reforms in a country that for decades has resisted change,” as the WSJ puts it. Of course, as the WSJ again puts it, much will depend on whether President Napolitano manages to convince a broad swath of Parliament to back the new government. But that, to be honest, doesn’t seem to be an impossible task. Third, whether or not (a government backed by) the Left will be up to the task. That’s the real issue that should worry everyone. And if you ask me what I think about this, I could sum it up in a sentence: I don’t really know, but I’m willing to hope for the best. And may God bless and keep us all. Amen.