ITALY: An analyst says there is no respite for Prime Minister Mario Monti's government after Senate definitively approves an emergency austerity plan

Record ID: 327660

  • Title: ITALY: An analyst says there is no respite for Prime Minister Mario Monti's government after Senate definitively approves an emergency austerity plan
  • Date: 23rd December 2011
  • Summary: ROME, ITALY (DECEMBER 22, 2011) (REUTERS) (SOUNDBITE) (English) POLITICAL ANALYST FROM AMERICAN UNIVERSITY OF ROME, JAMES WALSTON, SAYING "The Italian politicians are not free to do what they want. They have huge pressure from the markets. They have huge pressure from external forces and internal forces as well. So what prevents them from pulling the government down, causing serious trouble within Italy, are these pressures. Because if they bring the government down, then whoever does it will be responsible for the disaster which will follow." MEDIA COVERING SENATE VOTE WELFARE MINISTER ELSA FORNERO BEING CONGRATULATED AFTER VOTE MONTI BEING CONGRATULATED AFTER VOTE MONTI LEAVING SENATE
  • Embargoed: 7th January 2012 12:00
  • Keywords:
  • Location: Italy, Italy
  • Country: Italy
  • Topics: Economy,Politics
  • Reuters ID: LVACZJ0KPZ8NIUQ4A1K39401O7NE
  • Story Text: Italy's Senate passed a vote of confidence in Prime Minister Mario Monti's government on Thursday (December 22), putting the final seal on an emergency austerity budget to restore market confidence in the euro zone's third biggest economy.
    The upper house voted 257 to 41 for the government, following a similar easy win in the lower house last week.
    Monti, said he was happy with the vote, and Italy could hold its head high in Europe after passing the package of spending cuts, tax rises and pension reform.
    The passing of the budget, which intends to reverse a collapse of market confidence that has pushed Italy's borrowing costs to untenable levels and put it at the heart of Europe's debt crisis, has won praise from some in former Prime Minsiter Silvio Berlusconi's party.
    "I hope the government continues to proceed exactly like it's doing now, with seriousness and rigour. It has to try to soften the pressure that has been growing within Italians. But I think it has started in one of the most desirable ways, because it was able to gain the confidence vote of the parliament, and this is a big step forward," said Senator Giuseppe Valentino of the People of Freedom party (PDL).
    Monti replaced Berlusconi as prime minister last month and formed an administration of technocrats with broad parliamentary support to pass the so-called "Save Italy" decree.
    Berlusconi's failure to tackle major reforms and restore market confidence brought Italy to the brink of economic catastrophe. Even though market pressure has continued since Monti took power, some Italian politicians believe in his ability to lift the country out of crisis.
    "I think the government is going quite well. Now it's time for growth measures, and I'm confident that we have people in control, with a wide majority able to tackle the dramatic economic and financial issues the country has to solve," said Senator Francesco Rutelli of the Alliance for Italy party.
    Last week the government passed the budget in the lower house with a confidence vote to eliminate debate on dozens of amendments, many of them brought by the opposition Northern League, which was part of Berlusconi's administration.
    League deputies blew referees' whistles and held up a banner reading "Government of Thieves" in an attempt to disrupt the calling of the confidence vote in the Senate on Wednesday (December 21).
    "It's a package that goes against everything that was announced. It isn't fair. It only hits the lower levels of the society, and it definitely doesn't involve growth for small and medium size enterprise," said Fabio Rizzi, a Northern League senator told Reuters on Thursday.
    The votes in both houses allowed the broad swathe of parties supporting Monti to show that they were fully backing him out of a sense of responsibility, even if they were uneasy with the specific measures.
    Berlusconi's People of Freedom Party is worried about tax increases and the centre-left Democratic Party about pension cuts, but both parties know they cannot sabotage the bill without unleashing an economic disaster including a possible default.
    Political analyst James Walston of the American University of Rome said there was no respite for Monti's government despite passing the test on Thursday.
    "The government is not going to have an easy time now even with budget passed. Berlusconi made it very clear that he was going to keep the pressure up on Monti, not to allow the government to do things which he doesn't like. He also wants to make sure that he is still in the public eye, that he is still ready to take over when he wants. The centre-left has done more or less the same, rather more politely and rather more softly. But they have the labour unions behind them, and they have other movements behind, and they cannot be seen to be allowing the government to do what is in fact a conservative and centre-right budget," said Walston.
    Berlusconi had promised Monti full support but expressed his concern that "the horse's medicine could kill the horse", a reference to the widespread fear that the budget could stamp out fragile growth.
    "The Italian politicians are not free to do what they want. They have huge pressure from the markets. They have huge pressure from external forces and internal forces as well. So what prevents them from pulling the government down, causing serious trouble within Italy, are these pressures. Because if they bring the government down, then whoever does it will be responsible for the disaster which will follow," Walston added.
    Monti says markets will eventually react positively to Italy's efforts, arguing that lower interest rates will help offset the effects of the austerity measures on growth.
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