Squeaky clean survivor Amato is an outside tip for top IMF post

 

In the autumn of 1992, a journalist friend was standing in a cinema queue one Saturday night in Rome when he was distracted by a fuss behind him. Looking round, he found that the man standing in line behind him, patiently waiting to buy his ticket, was none other than the then prime minister Mr Giuliano Amato, accompanied by his wife and one security officer.

In a country where politicians routinely abuse the power and social status conferred on them by public office, Mr Amato was and is an exception. The man, who this week emerged as an outsider for the post of managing director of the International Monetary Fund (IMF), has proved to be a remarkable political survivor, with a "squeaky clean" reputation that not even a 35-year membership in a Socialist Party dominated by the late, disgraced prime minister Mr Bettino Craxi could sully.

Currently Treasury Minister in the government of Prime Minister Mr Massimo D'Alema, Mr Amato (62) took over that post from former Bank of Italy governor Mr Carlo Azeglio Ciampi shortly after the latter was elected state president last May.

Now listed as an independent, Mr Amato twice served as cabinet under-secretary under Mr Craxi before serving as treasury minister under two Christian Democrat prime ministers, Mr Giovanni Goria and Mr Ciriaco De Mita, between 1987 and 1989.

When the fallout from the "Tangentopoli" corruption investigations prompted the collapse of Mr Giulio Andreotti's coalition government in 1992, the thankless task of trying to steer Italy through a period of extreme political and economic turbulence fell on his shoulders.

He served as prime minister for only 10 months from June 1992 to April 1993 but that was long enough for him to firmly indicate a radical change of direction in the handling of Italy's then notoriously runaway public finances.

Within months of taking office, he had both devalued the lira and taken it out of the European Union's exchange rage mechanism (ERM). In the same period, he had introduced a bold $75 billion (€78.5 billion) "austerity" budget, the first of its kind, which combined tax hikes with social security and health cuts: "My government is one of necessity, not popularity. I am trying to tell people that things can no longer be the same," he told the International Herald Tribune at the time.

In some senses, Mr Amato took the first, tentative steps down a path of fiscal rectitude later trodden by both Mr Ciampi and current European Commission President, Mr Romano Prodi - a path that ultimately led Italy, against all the odds, into the start-up of the euro.

Discussing the withdrawal yesterday of the candidacy of German Deputy Finance Minister, Mr Caio Koch-Weser, Italian Foreign Minister Mr Lamberto Dini suggested the ideal candidate for the IMF post would have to be a much more authoritative figure than Mr Koch-Weser, someone such as "a treasury minister, an ex-treasury minister or an ex-prime minister". Clearly, Mr Amato fits that particular description.

In his current role, Mr Amato could be accused of having done little or nothing by way of fundamental reforms to the state pension system, widely perceived as a major future problem for the Italian economy. Italy currently pays out more pensions than it has workers and an Ecofin meeting two weeks ago in Brussels warned that Italy's debt, already the highest in the EU, was destined to rise again unless pensions savings were made.

In fairness to Mr Amato, the accusation of having failed to implement radical reform of the state pensions system could be directed at just about any prime minister and/or treasury minister of the last decade.

A more substantial reservation about Mr Amato might be linked to his ill-fated attempt in March 1993 to introduce a government decree that would have decriminalised the party financing violations at the heart of the "Tangentopoli" scandals. An outraged public opinion perceived the measure as a "whitewash", aimed primarily at clearing all Mr Amato's cronies in the Socialist Party, the party most heavily implicated in the scandals. In the end, such was the level of populist anger that then president, Mr Oscar Luigi Scalfaro refused to sign the decree.

Sensitivity to the mood of public opinion, however, is probably not high on the job description requirements for the post of IMF managing director. Mr D'Alema yesterday indicated that Italy would thoroughly approve Mr Amato's candidacy but only if it had the full backing of the EU. However, with an Italian, Mr Prodi, at the head of the EU Commission, other member-states may be slow to endorse another for this post normally assigned to a European. But, in the event of France, Germany and Britain having to look for a "compromise" candidate, Mr Amato is on standby, ready and waiting.