Monday, September 10, 2012

Talk increases of second Monti government in Italy

By Barry Moody

CERNOBBIO, Italy (Reuters) - Business leaders and European officials cloistered in a beautiful lakeside resort over the weekend were in striking agreement about who should follow Mario Monti as Italian premier: Mario Monti.

Italy's Prime Minister Mario Monti gestures during an interview at the Ambrosetti workshop, an economic conference, in Cernobbio, next to Como, September 8, 2012. REUTERS/Paolo Bona

Uncertainty about what will follow Monti's technocrat government after elections next spring is worrying investors, who fear a new government led by elected politicians will try to tear up the painful reforms that have restored Italy's credibility under Monti.

Among the elite gathered at the annual Cernobbio conference, the solution seemed obvious - a "Monti-bis" or "Monti-two" government, despite the fact that the man himself has consistently denied he is available.

Outside the luxury precincts of the Grand Hotel Villa d'Este sentiments are rather different, with a majority of ordinary Italians and politicians highly suspicious of the idea.

However, bankers and businessmen inside queued up to praise the sober economist's work, which pulled Italy back from the brink of a Greek-style debt crisis after President Giorgio Napolitano appointed him to replace scandal-plagued Silvio Berlusconi last November.

Enrico Cucchiani, CEO of Intesa SanPaolo bank said it was essential that Monti stayed on. "I believe this is not only fundamental but extremely probable in the sense that alternative solutions could imply big risks for the country," he said.

More than 80 percent of the 137 bankers, businessmen and senior academics attending the meeting on the shores of Lake Como want Monti to continue his reforms next year and prevent backsliding under Italy's squabbling politicians, according to a survey by the Italian news agency Radiocor.

The atmosphere inside the hotel produced ironic headlines in some Italian newspapers, which, like politicians, accused the elites of trying to replace democracy.

"Monti bis. It is already all decided," said the leftwing il Fatto Quotidiano.

"The millionaires' club...has decided. We must undercut this absurd demand that the people want to decide their future - we are in charge here," said Berlusconi's il Giornale under the headline: "All Monti's slaves."

The conference at Cernobbio can be vulnerable to the accusation that the participants are a bunch of hyper-rich elitists out of touch with the real world. The gathering is in a spectacular location on the edge of a lake dotted with millionaires' villas including that of Hollywood actor George Clooney.

RESENTMENT

This can cause resentment, even in the prosperous area of Como itself. "They don't know what normal life is like. They are big bankers and professors. That's all. They are not equipped to take care of ordinary citizens," said local taxi driver Giuseppe Mamone.

Asked if Monti should continue after elections due by April 2013, he told Reuters: "Absolutely not. He is not a prime minister who can pursue the policies we need in Italy. He is a banker, not a politician.

"The next government must think about the common people and not this group of bankers as he is doing."

Monti is actually a former academic economist and European Commissioner.

Nicola, a 47-year-old ski instructor from Cernobbio, who did not want to give his full name, said: "Another government led by Monti would only help today's main parties by prolonging the status quo."

He supports the populist Five Star Movement led by comedian Beppe Grillo which has built major support by raging not only against Italy's discredited politicians but Monti and his unpopular austerity policies.

A poll published by the Corriere della Sera newspaper on Sunday showed indeed that the opinion at Cernobbio was far more strongly in favour of a Monti-bis than the general population, among which the idea won only 37 percent support.

However, the chaotic political landscape less than eight months before elections is encouraging speculation that a new government could be led, if not by Monti, then by one of his technocrat cabinet, most likely Industry Minister Corrado Passera.

Despite years of discussion and impatient urging by President Napolitano, the politicians cannot agree even on a new electoral law to replace one so bad it is called "the pigsty".

Who will lead the two biggest parties into the election is uncertain as are the alliances that will campaign together.

Passera has recently given signals that he may have political ambitions and on Saturday turned up at a meeting of the Catholic, centrist UDC, led by Pierferdinando Casini, which some are already dubbing the Monti-bis party.

"There is so much confusion that if you asked Italians who they will vote for, 99 percent would not know how to reply," said taxi driver Mamone.

DEADLOCK COULD BRING MONTI BACK

Former Prime Minister Romano Prodi told Reuters at Cernobbio there were circumstances in which Monti might return after the election, including the possibility that a winning party or coalition could call on him.

"I am convinced if there is a deadlock, if he is asked again to give a service to the country, he will do it. If there is a clear winner of the election that person will be prime minister or will designate the prime minister."

But politicians here said Italy must return to normal democratic processes next year after the technocrat interlude.

"The voters must decide who governs the country. That is what elections are for," said Piero Fassino, mayor of Turin and a senior member of the Centre-Left Democratic Party, which has a strong lead in opinion polls.

Angelino Alfano, secretary of Berlusconi's centre-right People of Freedom (PDL) party, told reporters: "I believe that democracy is about holding elections and appointing whoever wins them to government ... Those who want Monti must put his name on the ballot paper."

But others in the PDL, which is fighting to beat off a threat from Grillo's populist forces, are more scathing about Monti.

In remarks which might worry nervous investors, Renato Brunetta, an economic minister in Berlusconi's last government, said in Cernobbio: "This country is suffering a brutal recession, the poisoned fruit of policies imposed on the Monti government by Germany.

"Enough of the technocrat government. The blackmail has finished," he told reporters. "The economic policy of the Monti government must change immediately or the country will die."

Despite such language, which is likely to become more inflammatory as the election approaches, many are sanguine about the possibility of Italy changing course.

Monti's government has tried during its short term to lock the country into reform policies aimed at cutting a huge debt and reversing a long economic stagnation.

Federico Ghizzoni, CEO of Unicredit, Italy's largest bank by assets, told Reuters: "There is not much space to change policy. I am pretty confident that what Monti is doing will continue."

International economist Nouriel Roubini took a similar view. "While people worry about electoral uncertainty in Italy, in my view there is probably not going to be much alternative to some variant of 'Montismo'," he told reporters.

(Additional reporting by James Mackenzie, Lisa Jucca, Francesca Landini, Luca Trogni, Elvira Pollina, Elisa Anzolin and Gianluca Semeraro)

News

Monday, September 10, 2012

Talk increases of second Monti government in Italy

By Barry Moody