Monti: Italy must stop being Europe's weak link

2011-11-17 19:01

Rome - Italian Prime Minister Mario Monti on Thursday outlined his government's programme - focussing on eliminating the budget deficit in 2013 and stimulating economic growth, including through changes to the country's rigid labour market.

"We must overcome the situation in which Italy is the weak link of the chain in Europe," Monti said in a speech delivered before the upper house of parliament, the Senate, ahead of a confidence vote that he is widely expected to win.

"With the reforms the spread will narrow," Monti said adding: "The choices made by investors who buy public debt are guided by their expectations on what [the economy] of Italy will be like in 10 and 20 years time."

Monti was referring to the recent spike in Italy's borrowing costs and market doubts over the country's credit-worthiness. These have pushed to more than 500 basis points the spread between the premium demanded by investors for Italian government bonds compared to Germany's.

Monti said sacrifices would be necessary but that the "distribution of sacrifices would be a fair one".

At one stage the new premier was interrupted by applause. "Don't applause, listen!" Monti said.

Monti said his government would aim to eliminate Italy's budget deficit by 2013, a pledges first made in recent months by former prime minister Silvio Berlusconi.

To achieve this, Monti indicated that further cuts to state spending would be required, including to public administration costs, which the premier said would result in the scrapping of the country's more than 100 provincial government entities - an unkept election promise made by Berlusconi.

Monti said his government would also reform Italy's "inequitable" pension system, which currently allows some people to retire early.

Tax on real estate

In his 45 minute-speech, Monti offered some specific examples of the measure that the new government is considering.

Among these was the need to introduce fiscal reforms, including the possible introduction of a tax on real estate, describing the current absence of a tax on first homes as an "all-Italian anomaly".

The government would also step up efforts to combat tax evasion, which Monti said amounts to "almost one fifth" of the country's gross domestic product.

The premier's speech came ahead of a confidence vote in the Senate scheduled for later on Thursday. A similar vote is expected in the lower-house Chamber of Deputies on Friday.

Italy's two biggest political parties - Berlusconi's conservative People of Freedom party and the centre-left Democratic Party - have both said they will back Monti. A centrist grouping has also said it will back the former European Union commissioner.

Monti's cabinet, which consists mostly of academics and experts and contains no political party representatives, was sworn in on Wednesday.

Monti, a respected economist, also holds the post of interim Economy Minister.

His appointment has been welcomed by Italy's main eurozone partners, German and France, as well as the EU executive in Brussels.

"You [Monti] have taken office at a difficult time for your country as well as for the eurozone in general, but also amid great hopes and expectation," German Chancellor Angela Merkel said in a message to the Italian premier.

EU President Herman Van Rompuy said he planned to meet Monti in Brussels nest week.

"I expressed the EU's full confidence on the Italian capacity to overcoming its current situation and to fully contribute to solving the euro area financial crisis," the EU president added.

Read more on:    mario monti  |  italy  |  euro debt crisis

Read News24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
1 comment
Add your comment
Comment 0 characters remaining

Inside News24


Hottie of the day: Charlotte

Meet our hottie of the day, Charlotte. She feels sexiest after a good workout at the gym!

This is why guys shouldn’t be in photos
BMW drift battle: M235i vs. speedway bike
Want to start talking dirty?
And this year's Miss Bumbum title goes to...

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Magical Massinga

Spend 5 nights at the gorgeous Massinga Beach Lodge in Mozambique and only pay for 4 from R13 220 per person sharing. Includes return flights, accommodation, transfers and romantic turndown. Book now! - shop online today

Festive gifts!

Check out our awesome range of festive gifts to make everyone’s wishes come true. Shop now!

Seen something you like in our catalogue?

Find the perfect gift and save up to R5000 – As seen on the catalogue. Hurry and shop now!

Save up to R2200 on electronics! – As seen in the catalogue

Wishing for tech gadgets this festive? Save up to R2100 on hot tech products at While stocks last. Shop now!

Up to 35% off books

Save up to 35% on the latest page-turners. While stocks last. Shop now!

Good Morning, Mr Mandela by Zelda la Grange

Good Morning, Mr Mandela tells the extraordinary story of how a young woman had her life, beliefs, prejudices and everything she once believed in utterly transformed by the greatest man of her time. Now R221. Pre-order now!

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25


You have the ability to lead and take up campaigns that can sway the crowd and make things happen. There can be a more

There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.