13 aprile 2012

Give Monti a hard hat

Now that Mario Monti’s ambitious reform agenda has reached the implementation stage, it is little wonder that he is being lambasted from all sides. Bond investors are rattled, major unions are threatening widespread strike action against his reforms and some politicians who previously supported Monti’s efforts are now vacillating under the weight of public protest. Monti will need a hard hat.
One of the major unions, CGIL, has called a strike for tomorrow in response to his pension reforms. It is also contemplating industrial action once parliament starts to discuss Monti’s controversial labour reforms. The latter has drawn widespread condemnation from employers as well. No one is happy, it seems – the unions are up in arms and the employers are incensed by Monti’s climb-down on regulations allowing them to sack workers for economic reasons without fear of reinstatement. For their part, Monti’s ministers are deeply frustrated as well, having spent no less than two months in close consultation with both the unions and employers, only to be roundly condemned after the process was completed. Who would be a politician? That said, Monti and his cabinet are winning plaudits for their pluck from foreign leaders and international investors, as well as some of the biggest names in Italian commerce.
Interestingly, the political landscape in Italy is changing at a rapid rate of knots. The Northern League, a critical member of Silvio Berlusconi’s coalition over recent years, is disintegrating. Umberto Bossi, its leader, has resigned amidst allegations of fraud, money laundering and misuse of funds. Other senior members of his party have also resigned.
Structural change has been essential for Italy. However, as is inevitably the case, rapid change can be deeply unsettling. Unfortunately for Italians, rapid change will be a constant over the next few years.

(Via FX-MM)

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