January 28, 2012

And Super-Mario Became "The Iron Monti"

“Most Italians regard their government as something that’s not going to help them, and as something that is to be avoided as much as possible,” said David Gilmour—a British biographer and historian, and the author of The Pursuit of Italy: A History of a Land, Its Regions, and Their Peoples—in a “cultural conversation” with him, published in the Wall Street Journal on November 25, 2011.

Of course, this is absolutely true, although perhaps in a slightly different sense than he might have meant it: is it that bad to distrust the government? Europeans, and Italians in particular, unlike Americans, had good reason to distrust the state in the course of their history. And yet, notwithstanding the differences between American and European history, it was one of the greatest U.S. presidents, Ronald Reagan, who said “The government is not the solution to our problem; government is the problem.”

Well, to be honest and straightforward, both senses of Gilmour’s statement are actually applicable to Italy: one—the latter—is good (at least in my view) the other is bad. But what would you say if you were told that things are quickly changing in Italy, and that what was true yesterday is no longer true today? Yes, Italians do trust the new government, despite the magnitude of the sacrifices they are being asked to make, they trust the “technocratic” government leaded by Super-Mario Monti. And so do the vast majority of international observers and media. “Europe rests on Monti’s shoulders,” as the Financial Times title declares—but let’s hope there are also other people on whose shoulders the future of Europe might well rest, even though, as the Economist puts it, the Italian Prime minister—“The Iron Monti”—is set fair to become his country’s Margaret Thatcher.

Be it as it may, Monti is doing well. At the moment he is in full liberalization swing, even though he does not like the term “liberalization” applied to what he is trying to do, “normalization” would be a much better term: what Monti is attempting to do is to lead Italy in the direction which countries like the UK and USA have been following for years.

Of course, there is no guarantee that Monti will succeed (But then again, who knows anything about anything these days? Oops, sorry, I forgot the rating agencies...):

Big spending cuts and tax increases are one thing. The real test will come in liberalising the economy. Here he confronts a honeycomb of closed shops, restrictive practices and rent-seeking cartels. This week Italian cities have been thrown into chaos by taxi drivers and truck operators. Lawyers, pharmacists and petrol-station operators are also up in arms at plans to strip away their privileges. This will not be easy.

The choices are unavoidable. The debate about the future of the eurozone is hopelessly polarised. On one side stand those who say the enterprise can be saved only if Catholic southern Europe absorbs the Protestant north’s culture of thrift and hard work. On the other side are those who say that all would be well if only the Germans were ready to spend and borrow more and underwrite the debts of their southern neighbours. Both sets of arguments are hopelessly naive.

The challenge facing Europe – one crystallised by the euro crisis – is to adapt to a world in which it can no longer dictate the terms of exchange. Policymakers and economists can argue all they like about the merits and demerits of devaluation or fine-tuning the balance between fiscal rectitude and support for demand. The big question is whether Europe can compete in a world over which the west no longer holds sway. That’s why what Mr Monti is doing in Italy really does matter. [FT]


P.S.: I said that “Italians do trust Mario Monti” and his new government. Here is an incontrovertible proof of it: according to an online poll published yesterday in the Radio Padania’s website—Radio Padania is the official radio of the Lega Nord, which is now the main opposition party—80 percent of the voters said they are “in favor” of Monti and his new government. One hour after the results were published, the page was removed from the website. (Corriere della Sera, in Italian)



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