New premier offers economic rescue plan for Italy
ROME — Mario Monti, the newly chosen prime minister of Italy, unveiled an ambitious growth-boosting program before the Italian Senate on Thursday, warning that Italy and Europe faced a moment of “serious emergency” and calling on lawmakers for national unity and responsibility.
At a time of international financial instability that is threatening the euro currency, and with the eyes of world markets on Italy, Monti, an economist and former European commission member, said his government would work to change Italy’s labor market and pension system, fight tax evasion and make it easier for businesses to grow. But he also urged Europe to understand what is at stake if it leaves Italy to its own fate.
“The future of the euro depends on what Italy does in the next few weeks. Partly, not only, but partly,” Monti said, warning that “the end of the euro would unravel the single market, its rules, its institutions, and would take us back to where we were in the 1950s.”
At the same time, he urged lawmakers to back his “government of national commitment.” The Senate and the lower house were expected to give his government a vote of confidence later.
Monti said in no uncertain terms that Italy was in economic difficulty and needed to act fast to strengthen its own finances and by extension shore up the euro. It was a marked change from the tenor of the previous government, under Prime Minister Silvio Berlusconi, in which acknowledgment of Italy’s economic woes was considered disloyalty, and where as recently as two weeks ago Berlusconi said that Italy was a wealthy country where “restaurants are full of people.”
By contrast, Monti said Italians could expect to make sacrifices in the months ahead, but pledged that those sacrifices would be fair, and evenly spread. Such measures would involve changes to the labor market and welfare benefits, and to Italy’s lopsided pension and fiscal systems.
Addressing what he called a fundamental cause of Italy’s low growth, he said the government would work to grant young people and women greater access to the workplace. “They are the two great wasted resources of the country,” he said.
He said the government would work to restore market confidence in Italy in the short term and to invest in structural changes that would help in the longer term, including changes to what he called Italy’s “inequitable” pension system.
“We need to focus on three pillars: fiscal rigor, economic growth and social fairness,” Monti said.
To spur growth, he said Italy must deregulate closed professional guilds, opening them up to competition, as well as improve the efficiency of public sector services.
Striking a statesmanlike tone, Monti also said that because citizens were being asked to sacrifice, cuts to the costs of elected officials as well as public administration would be “unavoidable.”