Mario Monti, the Italian Prime Minister, gave a public lecture at the LSE on the 18th January after a meeting with the Prime Minister, David Cameron. Monti discussed the strengths and influence of the Eurozone, whilst emphasising some of the “poor governance” occurring within the zone. He also expressed his wishes for the future of the European Union (EU), and the position of Italy within it.
Monti described the EU as having “the greatest potential it ever had to be beneficial to the world.” He said the financial crisis had lead to urgent demand for global governance, and cited the G-20 as a demonstration of this demand. Monti claimed that the EU has the largest amount of expertise in this area, and has great potential to show the way for global governance. However, he also stated that the EU “risks being undermined in its effective ability to display this, to bring this to the rest of the world, because of internal inadequacies of governance,” which he felt impeded the spread of European ideas to the rest of the world.
Monti went on to criticise both the governance of the EU as a whole, and the governance within the Eurozone, which he said was the topic of much of his discussion with Cameron earlier that day. He went on to say how he hoped the “constitutionalisation of the so called fiscal compact,” which would impact upon fiscal discipline, “will be the object of political agreement on the 30th January in the European Council.” Though it would not be formally signed until the 31st of March, Monti expressed that he hoped it would “allow all the concerned parties to be more relaxed.”
Monti also said that the EU is more appreciated since the financial crisis, due to “the attention paid in Europe…to the social aspects of the social market economy,” and that countries such as America and China respect “the social aspects of the European economic models.”
The Italian Prime Minister brought up growth policy, saying the “UK and the Eurozone have hugely common interests.”
Furthermore, he expressed the wish to see “the UK as deeply immersed in the inner core of decision making in Europe.” He also conveyed regret over the UK’s veto of the EU treaty on the 8th December. Monti said the spread between German and Italian bonds increased after the treaty failed, adding, “it would be great to have the UK fully on board.” He felt it is important that the EU comes “to some concrete, operational, enforceable solution.”
Expanding on his worries, Monti said that without “much greater commitment to bring[ing] economic integration further in Europe, the forces are there that would bring us backwards,” such as “nationalistic trends.” He also described the EU banking system as having been previously integrated, but due to “different national supervisory authorities” following “national logic,” the banking system is currently becoming less integrated.
Monti expressed deep concern over the seven per cent interest rate on ten year bonds, for both economic and political reasons, and reiterated that better governance of the eurozone was required to resolve this. He stated that transfers are not wanted, but rather the lowering of the interest rate. He spoke very positively of Eurobonds, claiming that even Eurozone countries with the highest graded bonds would ultimately benefit.
Monti’s strong austerity has not been well received by all. Luca Neve, an Italian photographer who attended the lecture, articulated grave concern for the measures, saying “everything is rising, and yet everything is being cut.” He also said: “they are not going where the money is,” as well as being deeply troubled by the state of pensions and rising retirement age.
Another audience member, an LSE PhD student, took a different stance. He was of the opinion that the Italian people are “out of touch with reality,” and that “the pension scheme has been the most generous, alongside Greece, in Europe.” He also added that “some of his [Monti’s] financial reforms are going to be more egalitarian than Berlusconi’s.”
Monti also received attention form a group of protesters that formed outside the building, angry at Monti’s unelected rise to power, as well as lack of belief in his level of cutting. 132 people joined a Facebook event page for the protest, though the actual number of protesters outside the Old Building did not reach that number.
Related posts:
- Departmental statistics show gender matters
- Why UGM matters
- A perspective on all matters religious
- Don’t keep my money in your arms
- Why the UGM matters 2: How some students felt about Howard Davies’ UGM appearance last week: