Brussels, 28/02/2013 (Agence Europe) - Amidst the attacks on him in the Italian and international media as having failed, Italian Prime Minister Mario Monti has made a spirited defence of the policies he had been introducing since 2011. At a conference on competition organised by the European Commission in Brussels, Monti said that, given the situation Italy was in when he took over, particularly the tough conditions for borrowing from the money markets, there was no choice than to introduce structural reforms and a strategy to rein in the deficit, reforms that were praised by the troika (European Commission, ECB and IMF) and that, if fully implemented, were deemed would boost growth.
Experience showed, however, that the growth did not materialise as fast as reaction on the money markets, and Monti said it was an “obvious fact that there are delays between the moment when a good policy measure is implemented and the moment the benefits become visible”, a fact that was not noticed by public opinion.
The presidents of the European Council and European Commission, Herman Van Rompuy and José Manuel Barroso, issued a common statement to the same effect: “The structural reforms implemented so far in Italy have helped to restore market confidence and its international credibility. If continued they will significantly raise Italy's growth potential. Italy has also put its public finances on a sounder footing which is an essential condition to ensure growth”.
Monti added that Italy had a good track record for the implementation of structural reforms, looking down on countries that asked for extra time. During his time as prime minister, he made it a point of honour to stick to the timetable: “I did not consider asking for a subsequent accommodation and postponement in spite of very, very tough conditions. I'm not blaming anybody but, of course, the credibility of such a policy of a country may suffer if other countries ask for postponement and get them”. When it unveiled its Winter Economic Forecasts last week, the European Commission left this option open under certain conditions (see EUROPE 10792) because some countries will fail to reach their targets. Following in the wake of Portugal, France and Spain, the Netherlands admitted on Thursday that its deficit would be around 3.4% until 2014, thus failing to meet the 3% target set for 2013.
In the light of the Italian election results, many European leaders are calling for a government to be negotiated very fast to avoid instability and the Italian president, Giorgio Napolitano, pointed out on Thursday that, under the Italian constitution, the country has 20 days to form a new government. Napolitano said in Berlin that Italy still had a government and “is not a contagion risk for anyone”. (EL/transl.fl)