Bloomberg News

Monti Plays Down Chance of Second Term as Calls for Encore Grow

September 09, 2012

Italian Prime Minister Mario Monti said his time in government was limited as he responded to growing calls from some of the country’s top executives and politicians to serve another term.

“The experience of a caretaker government is definitely episodic, transitory and limited in time,” Monti said at the Ambrosetti Forum, a meeting of bankers, corporate leaders and policy makers on the shores of Lake Como in northern Italy. Voters need to restore their faith in Italy’s politicians, said the 69-year-old former university president.

That wasn’t necessarily what the assembled entrepreneurs and chief executive officers wanted to hear. About four-fifths of those surveyed by Sole 24 Ore Radiocor before the conference said they hoped Monti would be reappointed following parliamentary elections to take place by April. The so-called Mont bis, or “Monti encore,” was backed publicly by Intesa Sanpaolo SpA CEO Enrico Cucchiani.

“I not only see a new Monti government as fundamental, but also extremely likely,” Cucchiani said to reporters on Ambrosetti’s opening day, Sept. 7. “Alternative solutions may damage the country.”

Monti declined to comment yesterday when asked by reporters if he would accept a second mandate.

Debt Crisis

Monti burnished his credentials with bankers and business leaders since his November appointment by reversing a slide in Italian bonds and curbing speculation the government would need rescue funds from Europe. He imposed austerity to reduce the budget deficit at home and strengthened ties with German Chancellor Angela Merkel in a push for collective action to fight contagion from the sovereign debt crisis.

Italy has no current plans to apply for European aid, Monti’s finance minister, Vittorio Grilli, told reporters on the sidelines of the conference on Sept. 8. The day before in a Bloomberg Television interview, Grilli said it is not Monti’s priority to position himself for a second mandate.

“I think he is not thinking about it because we are so fully committed to working hard on what we are doing,” Grilli said. “That is what our brains are totally focused on.”

Eighty-one percent of respondents said they hoped for a second Monti government, according to the Sole 24 Ore Radiocor survey of 137 Ambrosetti attendees that included the chief executives of Italy’s biggest oil company, bank and telephone operator.

Euro Skeptics

Monti’s popularity is high among Italian executives even as the broader public penalizes the coalition of political parties supporting the government in parliament. The center-left Democratic Party and former Prime Minister Silvio Berlusconi’s center-right People of Liberty Party have seen their support eroded in opinion polls by euro-skeptic comedian-turned- politician Beppe Grillo.

Both parties will struggle to win outright in the next election and may need to resort to a second broad coalition to form a government, according to a Sept. 3 poll by IPR Marketing.

“If there is a stalemate, some sort of even result, probably Mario will be asked again to be at the service of the country,” Romano Prodi, who was prime minister from 2006 to 2008, said in a Bloomberg Television interview in Cernobbio on Sept. 7. Pier Luigi Bersani, who served as industry minister of the Prodi government, is leading the Democratic Party.

Monti’s austerity budget has helped ease pressure in bond markets, allowing Italy to shun bailouts of the sort put in place in Greece by the European Union and the International Monetary fund. Still, the tax increases and spending cuts have helped push Italy deeper into recession, sent unemployment to a 13-year high and stoked anti-euro sentiment among voters.

Healing Rifts

Monti, who previously served as a European Union competition commissioner, is trying to diffuse anti-euro tensions and close divisions between the countries in the north of the currency zone and the nations in the south that are most susceptible to fallout from the debt crisis.

He warned last week of hostility in the public toward European integration, and he proposed a code of conduct to prevent leaders from exacerbating divisiveness. On Sept. 8, with European Union President Herman Van Rompuy at his side, Monti called for a euro summit in Rome to address the tensions.

“One can’t help note a growing and dangerous sentiment of antagonism in member states,” Monti said. “It’s paradoxical and sad.”

Roberto Maroni, who opposes the government in parliament as secretary of the Northern League party, said Monti is erring in his response to anti-euro sentiment and welcomed a conversation with voters on the benefits and costs of European integration.

Following Berlusconi

“Monti has a peculiar conception of democracy,” Maroni said yesterday according to newswire Ansa. “It’s not populism to ask the people to tell us what they think about the euro and Europe. It’s democracy.”

Italian President Giorgio Napolitano shunned snap elections in November, instead turning to Monti when a surge in borrowing costs helped push Berlusconi to resign. Monti’s diplomatic push for more collective crisis fighting was given a boost last week with the announcement of European Central Bank President Mario Draghi’s program to aid government’s in distress.

Grilli praised the ECB plan to try to lower borrowing costs by buying sovereign bonds and said it would be “a positive element” if the IMF had a role in monitoring the countries that sign up for aid.

“Conditionality is an intrinsic part of how Europe works right now,” Grilli said in the interview. “We are all de facto under a conditionality program, which is further integration in Europe, working toward fiscal union.”

To contact the reporter on this story: Andrew Frye in Cernobbio at afrye@bloomberg.net.

To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net;


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