Monti’s Backers Slide in Polls Signals Risk for Fiscal Rigor

The four main political parties backing Prime Minister Mario Monti’s unelected government fell below 50 percent for the first time in an opinion poll, with support surging for an anti-austerity bloc.

The 5 Star Movement, whose leader, comic-turned-politician Beppe Grillo, says the nation may need to restructure debt and exit the euro, became Italy’s second-biggest party, a poll by the SWG Institute showed. Monti’s popularity fell to an all-time low of 33 percent, less than half the level when he was appointed in November, SWG said.

Italy, the bearer of the euro’s second-largest public debt, must have “budget discipline as a travel mate” in the future, Monti said in Parliament on June 13. Monti passed a 20 billion- euro ($32 billion) austerity plan in January that aimed to bring the budget deficit within the European Union limit this year. The measures contributed to pushing the economy into its fourth recession since 2001, with unemployment now topping 10 percent.

The Democratic Party, Silvio Berlusconi’s People of Liberty, the Union of Centrists, and the Future and Liberty Party, the main parties backing Monti, hold more than two thirds of the seats in Parliament and have faced a decline in support since the start of his government in November. SWG said the four are currently polling at 48.5 percent.

‘Softer Stance’

“Voters of the parties that decided to back Monti in order to save Italy from the crisis are perplexed now,” Maurizio Pessato, vice president of SWG said in an interview. “They ask themselves, if it was a case of much rigor about nothing and if it isn’t better to adopt a softer stance” on budget and economic policies.

Italy’s borrowing costs surged this week after Spain requested a 100 billion-euro bank rescue, fueling contagion to Italy. Italy’s 10-year yield reached a four-month high of 6.22 percent on June 13, approaching the 7 percent level when Monti came to power.

Backing for the People of Liberty Party fell to 15 percent, while the Democratic Party was little changed at 24 percent, the Union of Centrists’ rating declined 1 percentage point to 5.7 percent and Future and Liberty Party was at 3.8 percent, the poll published today by SWG showed.

SWG polled 900 people between June 12-13 and the survey had a margin of error of 3.3 percent, the company said.

Monti’s Appointment

Since Monti was appointed to replace Berlusconi in November, the parties backing him have “lost more than 10 percent of popular support,” Pessato said. “There is a growing discontent with Monti’s action, because the crisis goes on and on and many realized that he hasn’t got a magic wand to overcome it.”

The other parties with seats in Parliament, Berlusconi’s former ally, the Northern League, and the Italian Values, received a combined 10.8 percent in the poll, SWG said.

By contrast, 5 Star Movement, founded by Grillo three years ago, has seen its support to 20.5 percent from about 11 percent last month, according to SWG.

Grillo’s movement had a strong showing in local elections in May, with five of its mayoral candidates winning in Northern cities and towns, including Parma. Running in national elections may be much more complicated.

“The problem with Grillo is that he hasn’t got allies, and he won’t likely have any,” Roberto D’Alimonte, a professor of politics at Rome’s LUISS University, said.

At a June 12 meeting with Monti, the leaders of Italy’s main parties pledged to back the government’s reform measures that are now making their way through parliament, according to a June 12 statement from the premier’s office.

The leaders of “parties that are on their way into decline, that will perhaps disappear after the forthcoming elections, have discussed our future with a gentleman that no one elected,” Grillo said in a June 13 post on his website.

To contact the reporter on this story: Lorenzo Totaro in Rome at ltotaro@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.ne

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