Monti responds after FT piece says not right man for premier
Raising taxes was necessary, argues outgoing head of govt22 January, 12:28
The article by columnist Wolfgang Munchau said that Monti, who was appointed 14 months ago to head an unelected technocrat government when the financial crisis forced Silvio Berlusconi to resign as premier, had failed to make the promised reforms and instead only raised taxes.
The former European commissioner, who is standing for office at next month's elections on a reform platform backed by several centrist parties, said that the piece overlooked what his government had achieved in an emergency situation.
"In November 2011 Italy was close to being shut out from the financial markets," he wrote. "Reducing the financing needs in this case was an imperative, and could be done only by raising taxes, which to a large extent had been decided but not implemented by the previous government". Monti said that the reforms his government had introduced to bring down prices and create more jobs in the service sector were "without precedent for such a short period of time and given the lack of a genuine majority in parliament".
"Italy's markets are now as open as the EU average, in some cases more, according to the OECD," he added. "It estimates the reforms will have lifted Italy's economic growth potential by at least 4% of gross domestic product by 2020. But the job is not over and could easily be undone. This is why I have entered the political arena".
Monti also hit back at Munchau's claim that European Central Bank President Mario Draghi deserved more credit for the easing of pressure on Italy's borrowing costs after Draghi committing the central bank to buying the bonds of countries caught up in the eurozone crisis if necessary.
The premier said this would not have been possible if Italy had not first put its economic house in order and also pushed for political backing for the ECB's bond-buying policy at a crunch European summit on the debt crisis last June.
"Without fiscal consolidation and reforms in a crucial country such as Italy, and without our leadership and determination leading to the June summit, it is doubtful the European Central Bank would have felt comfortable in saying and doing what it did afterwards, which was indeed crucial," Monti wrote.
The FT seemed to highlight that Munchau's piece featured his own personal opinions by subsequently printing an editorial on Italy's election.
In it the FT said both Monti and centre-left leader Pier Luigi Bersani, a former minister, had the "personal credibility" to govern Italy but said they had to give a clearer outline of the direction they wanted to take the country.
"During his time in government, Mr Bersani passed many reforms, including liberalising the legal professions and pharmacy shops," read the editorial "Mr Monti, meanwhile, is trusted both by investors and Italy's eurozone allies.
"However, neither leader has yet to set out a convincing economic vision for the country. "The Democrat leader has to prove he will not be taken hostage by the left wing of his party, which opposes reforms to an inefficient labour market. Mr Monti is right to argue for tax cuts but must spell out where he will find the savings needed to deliver them".
The paper was scornful of three-time premier Berlusconi, who is leading the centre right's campaigning but has said he will be economy minister if his coalition wins, not the head of government. It said the 76-year-old media magnate was not a "trustworthy leader" and lacked a "credible economic programme", describing him as a "plutocrat-cum-politician who is planning a comeback after taking his country to the edge of the fiscal precipice".
"Some elements of his election manifesto, such as steep cuts to government spending that would finance a reduction in business taxes, are sensible in principle," the editorial said.
"But we have heard it all before. In his nine years in power, Mr Berlusconi, the laughing cavalier, promised much but delivered nothing. Italians should not be beguiled again".