Monti needs to go beyond Davos crowd to conquer Italy
DAVOS, Switzerland (Reuters) - Mario Monti was preaching to the converted at an annual meeting of elite bankers and policymakers in Davos, but he must woo austerity-hit Italians and fend off a populist offensive to have similar success at national elections next month.
The Italian prime minister, an internationally respected former European Commissioner who now leads a centrist coalition, was welcomed as a hero as he arrived in this Swiss ski resort for a two-day stint at the World Economic Forum (WEF).
Foreign bankers who met Monti at a 45-minute, closed-door session described him as charming and thanked him for "saving Italy and Europe" when he took the helm of a technocrat government at the peak of the euro zone crisis 15 months ago.
Yet there was concern that promises of lower taxes and an easy way out of recession made by center-right leader and former prime minister Silvio Berlusconi may resonate among ordinary voters and end up derailing Italy's reforms.
"Monti has done a very good job in the time he had. It is of paramount importance that his reforms are further implemented in the next political regime," said Herbert Scheidt, chairman of Swiss private bank Vontobel.
"The political class has to ...stop making promises they cannot hold. They have to give a clear picture of the reality to their citizens."
WEF founder Klaus Schwab, a friend of Monti's, said there was "not sufficient knowledge about the depth of reforms" carried out in Italy and allowed the former economics professor to outline his achievements during a special one-to-one session.
"On behalf of all here in the room I wish you the possibility to continue on the path you have outlined," Schwab said, referring to the Feb 24-25 ballot Monti faces.
Polls have up until now pointed to a victory of the center-left Democratic Party led by Pier Luigi Bersani, who may eventually team up with Monti's centrists after the vote.
But Berlusconi, who has never attended the WEF, was seen making strides among ordinary Italians who are yet to see the benefit of Monti's reforms while the recession bites.
"The willingness to do reforms when Monti stepped in was incredibly high. The resistance is now incredible," said Siegfried Wolf, chairman of the supervisory board of Sberbank Europe AG, a unit of Russian lender Sberbank.
"That is why Berlusconi may once again find a good tail wind and Italy may end up having an unstable government."
At home in Italy, Giulio Tremonti, a former economy minister under Berlusconi and fierce opponent of Monti, criticized the prime minister for spending time with the "enlightened in Davos" while a crisis raged back home over secret derivatives trades at bank Monte dei Paschi di Siena.
The mounting crisis at Italy's third-largest lender, a bank with strong links with the center-left, risks eroding support for the Democratic Party.
Italy, which was on the verge of default in late 2011, has been able to regain investors' confidence under Monti. Borrowing costs on its massive public debt have halved since he came to power.
"Monti has done a lot in Italy and we are already seeing the first effects of that because the market in Italy is stabilizing while Spain is further decelerating," said Patrick De Maeseneire, chief executive of staffing company Adecco (ADEN.VX), who attended a private meeting with Monti.
- Malaysia air probe finds scant evidence of attack: sources |
- Search widened as Malaysia air probe finds scant evidence of attack |
- Confrontation in Ukraine as diplomacy stalls |
- Exclusive: Chinese raw materials also found on U.S. B-1 bomber, F-16 jets
- Freescale loss in Malaysia tragedy leads to travel policy questions
DAVOS, Switzerland - Climate change is back on the global agenda, with debate in the corridors at Davos given fresh impetus by U.S. President Barack Obama and U.N. Secretary-General Ban Ki-moon both highlighting it as top priority this week. Full Article