Bruges, 28/03/2014 (Agence Europe) - Just over a year after the collapse of his government, on Thursday 27 March, the former Italian prime minister, Mario Monti, discussed his experience of the talks among Europe's leaders to deal with the crisis, revealing that he had been put under pressure from his European partners while he was prime minister to accept a financial aid programme.
Addressing a conference at the College of Europe, Monti said that, in Italy, people saw him as a German, but he said that the austerity measures he had introduced had enabled the country to avoid a financial aid package, although he said: “I was under friendly pressure by some large and influential partners” in the EU. “Italy is the only country which has come out without asking for any support, Italy owes zero euros to the rest of Europe”, and recently exited the excess deficit proceedings, he added.
He said that the College of Europe in Bruges had given its fifth European Business Conference the subject of how “a second lost decade” could be avoided, but he commented that the question did not do justice to the European project.
Monti recognised the problems that have arisen in the European project, pointing out the “influence of Paris and Berlin in 2003 when they decided to use their high status to turn down the warning and sanctions from the European Commission. I was there. The European Commission proposed many times that there should be some 'ex ante' policy coordination” and penalties on governments that broke the budget rules. It was only with the emergence of the Greek crisis that the Commission's ideas about prior coordination of economic policies were given a new impetus.
Monti underscored the deliberate slowness of reaction by countries like Finland, Germany and the Netherlands. He told this newsletter that “Slowness was something deliberately pursued by Germany” but had been used to examine the options and keep German public opinion on board, which was itself necessary. He regretted the rise in populism seen in southern Europe. The troika of lenders (European Commission, European Central Bank and International Monetary Fund) that negotiates aid programmes for countries on behalf of the eurozone and IMF is “far from perfect, but a pragmatic day-by-day construction”, on the hoof in the middle of a “desert”.
Bernadette Ségol, Director General of the European Trade Union Confederation, said: “Collapse of the banking sector would have been economically terrible, would have brought a lot of problems, increased the debt, the public deficit and unemployment. No wonder many people now see the EU as a machine for cutting their protection and income”.
Looking to the future, Monti said that “some changes in the policy framework of the EU are necessary to bring more growth, particularly in southern countries. It is a pure illusion that individually they can go back to sustainable growth if they act in isolation”. He said the “framework of budget discipline should become more open vis-à-vis public investment (…) and contractual agreements, now called economic partnerships, were a needed step in order to rebalance”. Under these contracts between Brussels and individual countries, financial aid is given in response to implementation of reforms, but the idea is not popular at present among the member states. (EL)