'Super Mario' tapped to cure Italy's economic ills

November 13, 2011 - 2:30 PM
Italy Financial Crisis

In this picture taken Friday, Sept. 2, 2011, Mario Monti attends an economic fourm in Cernobbio, Italy. Italy's president began sounding out political leaders Sunday, Nov. 13, 2011, on whether to ask economist Mario Monti to try to form a government, a day after Silvio Berlusconi resigned with the nation on the brink of financial disaster. Giorgio Napolitano was holding back-to-back meetings as he seeks to establish whether Monti, the highly respected former European Union competition commissioner, or another contender can garner enough support to form a government and rescue Italy from looming economic doom. (AP Photo/Roberto Monaldo, LaPresse) ITALY OUT

MILAN (AP) — The man tapped to be Italy's next premier earned the moniker "Super Mario" in the halls of the European Commission, stopping such corporate giants as Jack Welch and Bill Gates in their competitive tracks.

Elegantly attired with a formal demeanor, Mario Monti proved his mettle as a tough negotiator when he blocked the merger of General Electric and Honeywell and levied a euro500 million fine against Microsoft for abusing its dominant position.

"He moves with caution and speaks with nuances. But he moves," said Carlo Guarnieri, a political scientist at the University of Bologna.

A leading economist, Monti is among the most respected men in the country and the most admired Italians in Europe.

That will be no guarantee for success in the Herculean task before him: building a majority large enough to push painful structural reforms through a fractured Parliament to prevent Italy from being dragged into the burgeoning debt crisis.

But he has some clear assets: he is part of the Italian financial establishment, has strong ties to European institutions and governments and enjoys the clear support of President Giorgio Napolitano, who gave Monti a mandate Sunday to form a new government.

Providing a sober contrast to the audacious Silvio Berlusconi, who resigned Saturday, Monti also is the favorite of the financial markets, which eased pressure on Italian borrowing costs after his candidacy gained currency.

Monti, 68, cuts an austere and serious figure, which people who know him say defies a subtle wit. He is multilingual and moves easily among European capitals. Now the president of Milan's prestigious Bocconi University, he spent 10 years at the European Commission, about half in the powerful post of competition commissioner, and is one of the founders of the Brussels-based Bruegel think tank, which blends research with policy recommendations.

Monti is fully engaged in the European conversation on the common currency and the role of its institutions. The night Napolitano named him senator for life in Rome this past week, Monti was sitting on a panel discussing the euro's future in Berlin.

"A person on the flight from Milan this morning asked me, 'Mr. Monti, are you sure your are taking the right flight?'" he quipped.

While there is no question Monti is part of the political elite and travels in the rarified circles of European policymakers, he does not give the impression of being out of touch with ordinary Italians. TV clips show Monti filling his car with gas — a clear contrast with fumbling responses by lawmakers asked recently by TV satire programs the price of fuel.

In perk-filled Italy, the image of Monti at the gas tank carries more meaning than that of a powerful figure engaged in ordinary tasks, but that of a powerful man who does not seek privilege — something he says he wants to stamp out.

"By introducing more competition, we will in due course introduce more merit and less of a role for nepotism, clientism, corruption, whatever," Monti said in Berlin this week.

Monti was born in the town of Varese, north of Milan, the son of a bank manager. As a teen, his father took him to see the U.S. and the Soviet Union at the height of the Cold War so he could form a personal view of the two powers.

He earned an economics and management degree at Bocconi and later studied in the U.S. at Yale, and spent years teaching economics at several Italian universities. He is recognized as a champion of the free market and reduced government spending, who has been influential in setting European and international antitrust standards.

"I have always been considered to be the most German among Italian economists, which I always received as a compliment, but which was rarely meant to be a compliment," Monti told a panel on the euro crisis hosted by the Dahrendorf Symposium in Berlin.

He has called the German culture of stability one of its "better exports" — a view which certainly will help Rome's relations with powerful Berlin as he tackles Italy's enormous debt and stagnant growth. But associates say he also is confident to stand up to European institutions — something the Berlusconi government has lacked.

Monti is well aware of the negative prejudices faced by Italians in the European arena, a view only exacerbated in recent years by Berlusconi's sex scandals, numerous trials for business dealings and public gaffes, sometimes at the expense of other leaders.

Although well-known in his own right, the contrast with Berlusconi is playing well across Europe. ZDF German television this week described Monti as a "sober finance expert — the opposite of Berlusconi."

"I think Mario is viewed as a breath of fresh air which would immediately garner that kind of positive sense from other major European leaders," a former U.S. ambassador to Italy, Ronald Spolgi, said on the sidelines of a conference at Stanford University.

Fellow Milan resident Giorgio Armani thinks Monti "is physically perfect for being premier," praising his "cerebral elegance."

Monti has managed a difficult feat in polarized Italy: He has respect both of the left and the right. Few would be able to court favor from both Berlusconi and archrival Romano Prodi, but Monti did just that. Berlusconi's government nominated Monti to the European Commission in 1994, while Prodi, at the time EU president, made him EU competition commissioner in 1999.

Berlusconi this week offered his congratulations to Monti on his appointment as senator for life, recognizing his "outstanding achievements in the field of science and social work."

Only in recent months has Monti openly said it was time for Berlusconi to go in the occasional commentaries he has published in Corriere della Sera since 1978.

While his lack of political strings has gained him widespread trust, it could also work against him as the head of a government of technocrats.

"There is concern being voiced here in some quarters about whether it is a good move to install a government which is not anchored in partisan politics in Italy. You need politics in Italy," said Paris-based Thomas Klau of the European Council of Foreign Relations. "Leaving that objection aside, I think there is no other figure currently in Italy enjoying so much cross-border respect as Mario Monti."

Monti has indicated his strategy for governing a politically divided Italy in editorials on the crisis he has written for Corriere, said Francesco Giavazzi, an economics professor at Bocconi. Recognizing that structural reforms will be unpopular in vast segments of the population, Monti's philosophy is to spread the pain: balance reforms harmful to voters on the left with those harmful to voters on the right.

"At the end of the day, you are at the same point. That is his philosophy to avoid the deadlock in the reform process," Giavazzi said. "You can argue that his theory will be very hard to implement. I think the strong point of the government is that it would have a very clear idea of what to do."

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Brooke Donald contributed from Palo Alto, California.