Will he remain 'Supermario' or become 'Superduped Mario'?

Anand declared his independence from his military appointers at the onset of his premiership. He characteristically made it clear that he did not agree with many things they were for, and even initiated an immediate release of the coup-deposed prime minister General Chatichai Choohavan from imprisonment. The West may say what it likes about that military-installed government, but the appointment of Anand was the most sensible act the coup leaders carried out.

Anand went on to become the best prime minister Thailand has had in its modern history. Many no-nonsense reforms and initiatives were made purely and entirely for the good of the country, not for lining the pockets of politicians. During his short tenure, Thailand moved further ahead in the right direction than at any time during previous governments. Credit has to be given to the coup leaders for taking their hands off their appointee and letting him do his job.

Anand had many chances to linger on in the seat of power, but he turned them all down, again and again. His government was the most disciplined and effective we have ever had. He left office as tall as, if not taller than, when he entered it; and the country was in a better place than before he took charge. In the end, the collective integrity of his government garnered respect and acceptability even from the die-hard detractors in the international community.

Mario Monti was a man of impeccable professional record. His form and substance is the complete opposite of the man who passed on the torch to him – Silvio Berlusconi. He is a man with a “golden Rolodex” for his networking reach among leaders within the European Union. What he does not have, which may prove fatal to the success and survivability of his premiership, is a solid internal political base. Unfortunately, the reform and austerity programmes he envisions in order to restore Italy’s financial stability will need to get the nod from both chambers of parliament. Political hands will surely not hesitate to wring Monti’s neck if their vested interests are adversely affected by these programmes.

Unlike Anand, who was more or less allowed a free hand in managing the affairs of the country, Mario Monti’s tenure will start off in negative territory. The Freedom People Party (PdL) of Berlusconi has already tried to put stiff conditions on his appointment. Among them are a time limit, the composition of his cabinet, and restrictions on the implementation of economic reforms and deficit cutting measures. Quite ironically, the livelihood of Monti’s government may depend more on the support of the opposition parties than that of the party that put him in office.

Already, the PdL has had a change of heart concerning the condition that all politicians of any party are excluded from Monti’s technocratic administration. It wants the inclusion in the new cabinet of Berlusconi’s right-hand man, Gianni Letta. The opposition Democratic Party (PD) naturally wants reciprocal treatment and has  asked that a centre-left politician of their choice, Giuliano Amato, be put in place alongside Letta.

So far, Monti has voiced opposition to one condition, which is the time limit. He insists that he needs until the next election in 2013 for his government to get the job done. Considering the daunting tasks he has on his hands, that desire is reasonable. But all things considered, politically and economically, Mario Monti will be walking in quicksand during this journey.

Berlusconi did not have any choice but to resign. With Italy’s sovereign debt of 120 per cent of the country’s GDP, the ten-year bond yield that had jumped to over 7 per cent turned into a debt-servicing burden of over 8 per cent of GDP. Given even a decent growth scenario of 2 per cent, the country still has the capital “D” for “Default” written all over it as it faces the refinancing of the 300,000 million euros of its debts in 2012. As a member of the euro zone, Italy is not allowed to borrow in its own currency, the key determining factor for interest rates.

The appointment of Mario Monti, as Italy’s “moment of truth” approaches fast and furious, is out of necessity and for expediency. By going with a temporary technocratic government, Berlusconi and his party remain in charge while taking no responsibility for any failure of Monti’s programmes, yet can still take full credit if things go right.  This “you win, I win; you lose, I win” scenario is the best way to describe Berlusconi’s move.

Hopes are high that the appointment of Monti to head the technocratic government in Italy will assure lenders that the country can speed up its economic overhaul. However, no austerity programme is ever going to go down easily with the people and politicians.  Monti has already spoken about sacrifices, but these days this word has somehow lost its significance. Besides, many economists argue that austerity has been a failure everywhere it has been tried. “No country with significant debts has managed to slash its way back into the good graces of the financial markets,” contended Paul Krugman.

It remains to be seen if Italians will embrace reform and go the  “full Monti”. He has spoken about turning Italy’s difficulties into opportunity. He said that the mission was the only reason he had agreed to take this job. He is the one who stands to lose the most if it fails. His is a Herculean task, but everybody, especially the Italian people, like to believe that Hercules exists and will show up from time to time to oust the ills. 

We in Thailand are still waiting for our Hercules.