There wasn’t an empty seat in the house when the new Italian Prime Minister Mario Monti greeted an eager foreign press for the first time on yesterday with his €30 billion emergency package.
The face of austerity arrived without a skerrick of make-up, a platform heel or a hair transplant in sight and I admit there was a moment when I longed for the slapstick of his permatanned predecessor.
Berlusconi, the one-time cruise ship crooner, loved to punctuate his rare media encounters with bizarre facial expressions that moved from a grimace to a theatrical grin. Never mind a tasteless s-xual reference.
“Monti tried to crack jokes but he didn’t have the same punch delivery as Silvio,” one British journalist lamented. “He was good at telling jokes, not sure about running the country.”
Despite 17 years in and out of office, Berlusconi never made it to the Foreign Press Club, which sits across from the headquarters of the People of Freedom Party that he founded. So when Monti announced his visit, a bank of TV cameras rolled across the back of the room and more than 120 journalists elbowed each other out of the way for a closer look at the sober economist equipped with a name meaning “mountains” — an apt title for what lies ahead of him.
Dressed in a conservative grey suit with a blue shirt and tie, the former professor with a shock of white hair and glasses reminiscent of Mr Magoo had come to the club in Rome’s historic centre to sell the package approved by his cabinet of “technocrats” on Sunday.
Entitled “Save Italy”, the new measures include: pension reform, the elimination of local government bodies, higher taxes and new restrictions on cash transactions. If approved by parliament, the package is expected to take effect next year and last for two years.
“Without this package Italy risks collapse and will find itself in a similar situation to Greece, a country for which we have great sympathy but which we do not want to imitate,” Monti told the media.
It was an impressive debut where substance triumphed over showmanship. Monti gave a broad outline of his spending cuts and tax reforms and slid from Italian to French and English with ease.
“He is the antithesis of Berlusconi,” said Paris-born journalist Sonia Logre-Grezzi from the France 24 news network. “He has a subtle sense of humour. But he is a very clever man that is managing to impose unpopular measures by saying it is either this or the country will fail. He also took his time today — two hours to answer all the journalists’ questions. This is something that Berlusconi would never have done.”
Monti’s executive is composed of academics, judges and bankers and there is not a politician in sight.
Patrizio Nissirio, a senior editor at Italy’s ANSA news agency, closely follows the Greek crisis and said that was the right move.
“Greece still has politicians in the executive whereas Italy has resolved to leave politicians out of the picture,” he told me. “Personally I favour the Italian solution because these ministers are not worried about being re-elected so they operate with greater freedom in the field of reform.”
As Monti warned parliament that Italy risked “falling into the abyss”, politicians across the spectrum began expressing their reservations about the impact of his proposals while the financial markets gave their resounding endorsement.
Bond spreads against the benchmark German bond fell to 375 basis points, 80 points off Friday’s close and 10-year yields fell below 6% to 5.95% for the first time in a month. Emma Marcegaglia, the straight-talking head of Italy’s largest employer organisation, Confindustria, welcomed the response.
“The markets reacted well to the government’s package and this is important,” she said. “With a spread of 570 you would have to say that you cannot sustain public spending nor would the banks be willing to finance it.”
But CGIA, an organisation that represents small businesses across the country, warned the new austerity measures would cost the average Italian family €635 ($A830) and a whopping €6400 ($A8352) over the next three years when added to Berlusconi’s reforms passed earlier this year.
“This risks bringing the country’s economy to its knees,” said CGIA secretary, Giuseppe Bortolussi. Sadly, if it does there will be several political rivals waiting to pounce.