Monti emerges as EU summit darling

Mario Monti darling.jpg

Italian Prime Minister Mario Monti won praise and political backing from other EU heads of states, including Germany's Angela Merkel, at a two-day summit meeting which opened in Brussels yesterday (13 December). Some of Monti's economic ideas also gained traction, with large infrastructure investments set to be taken out of public deficit calculations.

There was a celebratory atmosphere yesterday evening in Brussels following the breakthrough agreement earlier in the morning on banking supervision.

>> Read: Finance ministers clinch banking union deal

Leaders took their time to munch on a pan-fried top-side of Turbot, the ugly yet fancy flatfish, with a chocolate cake to finish.

But there was even "a slight air of boredom" about the summit, reported EURACTIV's correspondent Jeremy Fleming.

The evening discussion among heads of state and governments centred on a long-term roadmap to deepen the eurozone's economic and political integration – with potentially heated talks about a separate budget for the currency bloc.

But with everyone tucking into their chocolate cake and filled with a warm pre-Chistmas glow, no-one had the heart for a bust up.

The discussion was based on a report by European Council President Herman Van Rompuy, which included proposals for a eurozone budget – or "fiscal capacity" in EU jargon – to assist economic reforms in countries in difficulty.

France, Italy and Spain tried making a concerted push to include more precise language in the summit conclusions relating to the eurozone's solidarity and "fiscal capacity", diplomats told EURACTIV.

But the move was vigorously resisted by Germany, and the Mediterranean cabal decided not to push the matter further.

Monti wins praise

The real excitement, as often, came from the summit sidelines.

Mario Monti, the Italian Prime Minister who vowed to step down after his country's 2013 budget is approved, won praise from his peers, who urged him to stand for re-election.

Angela Merkel, the German Chancellor, was asked at an evening press conference whether Monti should be encouraged to stay. Her answer was diplomatic but unequivocal:

"As a German I will not intervene in internal Italian politics as to candidates and elections – we all refrain from discussing the internal affairs of others. But each leader said that the Italian government received their broad support. This government has done a very helpful job indeed to boost trust in Italy in the international markets and in the world."

The public endorsement for Monti – and the implied rejection of Silvio Berlusconi's attempted come-back – was also felt at a pre-summit meeting of Conservative leaders from the European People's Party (EPP).

Praise there came from the European Commission President José Manuel Barroso, who hailed the "considerable progress" achieved by Mario Monti in improving the country’s competitiveness and growth potential.

>> Read: Centre-right leaders back Monti to stand in national elections

Mario Monti's approval ratings were completed by an implicit recognition of his political skills, emerging as a clear winner at the summit, and also on his economic ideas.

Following a push by the Italian Prime Minister, the draft summit conclusions state, in the second paragraph, that public investments in large infrastructure projects can be counted out of public deficit calculations.

"The possibilities offered by the EU's existing fiscal framework to balance productive public investment needs with fiscal discipline objectives can be exploited in the preventive arm of the Stability and Growth Pact," according to the draft summit conclusions.

In other words, Italy could be given a green light to implement public investment programmes, such as road building, or other large infrastructure projects, without these impacting on the country's deficit.

This has long been a request of Monti, and had been resisted by Merkel up to this point.

Italy is heading for early elections after former Prime Minister Silvio Berlusconi withdrew his support for Mario Monti’s technocratic government.

Monti announced on 8 December that he intends to resign once Italy's 2013 budget is approved.

Italy's mix of chronically low growth, a public debt mountain of €1.84 trillion, or 120% of GDP, and a struggling governing coalition are causing growing alarm on financial markets.

This has raised fears that it could follow Greece, Ireland and Portugal and apply for an EU-funded bailout.

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