Mario Monti was appointed Italian prime minister in November 2011 by consensus of the Italian parliament after a major run on the markets led to the resignation of Silvio Berlusconi. One year later Mr Monti has resigned after Mr Berlusconi’s party withdrew support. A similar market turbulence threatens a return of instability to the euro zone.
But this is also a welcome return of normal democratic politics to the euro zone’s third-largest economy, bringing forward next year’s elections and giving Italian parties and voters an opportunity to renew mandates.
Mr Monti was quite correct to stand down as soon as the largest parliamentary party made this move. His appointment in an emergency enabled necessary reforms to be brought in over the last year. It fulfilled its main purpose of stabilising political and market volatility in Italy and throughout the euro zone. As Mr Monti says, the single currency’s very existence was threatened by Italy’s troubles then – and that could still be the case. But unless these problems are resolved politically and with democratic not technocratic legitimacy the solutions found will be unsustainable.
Mr Berlusconi’s party is the largest in the parliament but, according to opinion polls, it now trails behind the centre-left Democratic Party by 20 points. Having withdrawn from the leadership last year in a welter of personal and political scandal, Mr Berlusconi is making a return on an anti-austerity, anti-German and anti-euro platform.
Despite his loss of credibility he can gain support among disgruntled voters on promises to reverse some of Mr Monti’s reforms. Looking at the changed political landscape, however, there is good reason to think the last year has created political space for the emergence of an alternative centrist or centre-left government committed to maintaining the thrust of Mr Monti’s policies and with a better opportunity to represent Italian interests than he was able to do. Should they defeat Mr Berlusconi that would confirm a clear European trend in favour of strengthening the euro among other electorates.
In a notable innovation the Democratic Party held primaries for its leadership in which Pier Luigi Bersani emerged the victor. This experience has strengthened the party’s internal organisation and helped give it electoral credibility. That may make it easier for it to find allies. Mr Monti too is being courted by centrist parties and is willing to explore a continuing role. His great weakness was to reinforce economic austerity and inhibit growth. That is difficult to do at national level within the current constraints of the euro crisis. A new government must be in a position to assert Italy’s interests by making progress towards mutualising debt within the euro zone.