The biggest test for Italian Prime Minister Mario Monti will be whether he can persuade a parliament inherited from Silvio Berlusconi to accept austerity, said European Union Trade Commissioner Karel De Gucht.
De Gucht said in an interview yesterday at Bloomberg News headquarters in New York that, while Monti has a “very sharp mind” and has put together an unelected government of “heavyweights,” he must convince investors he can impose debt- reducing measures on a parliament that is unchanged from that of his predecessor, who resigned Nov. 12.
“They can certainly make the proposals that will get them out of the crisis,” said De Gucht, who served as Belgium’s foreign minister from 2004 to 2009. “But they still have to demonstrate that they can get it through parliament because that old parliament is still there.”
The Italian Cabinet is due to approve on Dec. 5 an urgent package of measures and structural reforms aimed at preventing the euro area’s third-biggest economy from succumbing to the debt crisis. After that, it must be approved by the Chamber of Deputies and the Senate to take effect. While Monti has declined to put a value on the package, Ansa newswire has reported the measures may total about 20 billion euros ($26.9 billion).
“Italy is certainly an economy that has the capacity to rebound,” said De Gucht. “They have an industrial backbone, much more than, for example, Greece. They are still highly valued in the market.”