Monti, who relies on Berlusconi’s People of Liberty party to govern, told the Wall Street Journal in an interview published today that Italy’s borrowing costs would be substantially higher if the billionaire were still in charge.
“This unjustified provocation, as useless as it is stupid, will be returned to its sender,” said Fabrizio Cicchitto, head of the PDL delegation in Italy’s lower house. Maurizio Gasparri, leader of the PDL in the Senate in Rome, said “we could lose our patience sooner or later” with Monti. The PDL’s vice president in the Chamber, Maurizio Bianconi, said the party may consider “sending Monti home.”
Monti said in a statement he apologized to Berlusconi over the telephone. The Journal comments were Monti’s second gaffe in less than a week, unsettling his support at home after he riled up euro-area partners with an interview in a German magazine.
‘Attack on Democracy’
The unelected Monti, in the Aug. 5 interview with Der Spiegel, called on governments to exercise greater autonomy from national parliaments as they confront the European debt crisis. Those comments were an “attack on democracy,” according to Alexander Dobrindt, general secretary of a Germany’s Christian Social Union for Bavaria. Monti responded yesterday, saying that lawmakers’ autonomy was “not in question.”
In his apology to Berlusconi, Monti said his remarks were misinterpreted.
Monti “is sorry that a banal and theoretical trend extrapolation of the values of the spread, which was contained in a broader discussion with the WSJ, was received as a political statement,” according to a statement from his office.
Italy’s 10-year bond yields have declined by more than 100 basis points since Monti came to power in November. The country pays 447 basis points more on 10-year debt than Germany, a level similar to when Monti arrived as German bonds have also advanced. In the interview, Monti said that spread would be 1,200 basis points under the old government.
Monti is under pressure to demonstrate the value of his austerity-focused government as Europe’s debt crisis threatens to push Italy into an international rescue. He is seeking to convince the electorate that his spending cuts and tax increases, which have driven Italy deeper into recession, have improved the country’s finances.
“I know that we are not recognized as saviors of the country,” Monti said, according to the Journal. “But I am convinced that we did salvage the situation.”
Monti had no intention of stoking controversy with his comments, a government official said in a statement prior to Monti’s apology. Italy needed an unelected government of technocrats to ease bond market speculation, the official said.
The center-right PDL is the biggest party in Monti’s coalition, which also includes Berlusconi’s traditional rivals in the center-left Democratic Party. Monti, a former university president and European Union commissioner, formed his Cabinet from apolitical ministers brought in to government from academia and business.