Tuesday, August 7, 2012

Mario Monti to the WSJ: "Spread at 1200 if the previous government were still in power"

PM Mario Monti finally said it.
He was interviewed by The Wall Street Journal, and his statements already caused the rage of Berlusconi’s party, People of Freedom. He claimed that Italy would be in an even worse economic situation if it weren’t for his government.
Here is the incriminated excerpt:

“Question: Why, despite your measure, have Italy’s borrowing costs remained so high?

Mr Monti: Spreads are still high because our debt is objectively very high, and markets have started realising in a dramatic way that Eurozone governance is weak. France has done much less reform than we have and yet its spreads are lower. I think the reason is that people believe Germany will never let France go. I think that if the previous government were still in power, Italy’s spreads would now be at 1200 or something.”

Well, he might be right. Monti could probably do more, but I have no doubt that if we had Berlusconi in power, he would still be claiming that there is no crisis and therefore he wouldn’t do anything to solve it. And that holds for almost every party in Italy. If the oppositions actually knew what to do, they would be asking for early elections. They are all very good at criticising Monti, but at least he is trying. Does anyone else in Italy actually have the guts to do something? 

Excerpts from the WSJ interview: http://online.wsj.com/article