Italy's Monti: Financial Situation Makes Progress

Sunday, 19 Aug 2012 04:27 PM

 

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Italy's financial situation has made progress compared with last year, the premier said Sunday, believing the country will eventually emerge from the bleak economic crisis.

Mario Monti said the condition of the economy was "worse" in 2011, before he was appointed to lead Italy down a tough path of austerity, new taxes and pension reforms.

But Monti, an economist who put together a government of technocrats in November, didn't venture any timeframe for the hoped-for exit from financial distress.

"I work daily to grapple with the crisis," Monti said in a speech to politicians, labor and industry figures to the Adriatic beach resort town of Rimini.

"But are we really in crisis? A year ago, we thought we were less so, but perhaps we were more so," Monti argued. "I see the moment approaching in which we'll emerge."

He explained that by pushing through Parliament measures that politicians had avoided for years, like reining in Italy's generous pension system, the country is in many ways in better shape now than when he took the helm.

Monti was appointed to replace media mogul Silvio Berlusconi, who resigned under intense market pressures as Italy's borrowing costs soared against a backdrop of a high deficit, sluggish economy and stubborn unemployment.

With elections looming in spring, there is the risk that political leaders will increasingly resist Monti's prescription for financial healing, which so far has included the revival of property taxes, higher sales taxes, slashing spending and raising the age Italians can retire with generous pensions. Monti has said repeatedly that he won't run for a new term.

In his speech, Monti lavished praise on lawmakers from a wide political spectrum, who so far have generally given him his way in his anti-crisis strategy. "Daily I see the miracle" of rival politicians pulling together to back his proposals, Monti said.

One of the few political parties to oppose Monti has been Berlusconi's ex-ally, the regional Northern League. But the League, weakened by scandals, has lost much of the clout it had enjoyed as the lynchpin party in three Berlusconi coalitions since the early 1990s.

Referring to the widespread legislative backing he has so far experienced, Monti said that "it wasn't easy to predict that they would have been imbued with a sense of responsibility. " Still, Monti said, Parliament during his government has "taken decisions that were put off for years."

But he lamented that Italy's youths have paid a "very high" price in terms of bleak job prospects, because politicians avoided for years had avoided tough action, such as labor market reforms.

Monti boasted that Italy now has "more respect, credibility and even influence in Europe" thanks to Parliament's achievements. As a highly respected economist not representing any political party, Monti has been seen in Italy — and in Europe — as being in a strong position to challenge German Chancellor Angela Merkel when it comes to forging European-wide decisions aimed at saving the euro.

Referring to growing anxiety in the eurozone that Greece might have to drop out of the single currency grouping, Monti said it would be "tragedy if it (the euro) became, due to our shortcomings, a factor of disintegration that will revive the prejudices of the north (of Europe) against the south and vice versa."

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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