In an interview, not only does Mr Monti tell the Financial Times he agrees with almost everything in S&P's analysis, but he jokes that he could almost have written it himself.
“If I ever dictated anything, it must have been what S&P had to say about domestic Italian economic policy,” he chuckles, before quickly correcting himself: “I never said the three letters BBB,” a reference to Italy's new S&P rating of triple B plus. Apart from Cyprus, it is the lowest standing of any country in the eurozone not to have undergone a recent bail-out.
So pleased is Mr Monti with the report that on Monday he almost bounds to pick up a copy. It lies on his desk, a grandiose antique befitting the gold leaf, chandeliers and frescoed ceiling of his Roman office but cluttered with the detritus of a workaday economist: teetering stacks of paper, a half-empty plastic bottle of water, a personal inkjet printer.
The reason for his pleasure is apparent as he reads from the report. “It's very interesting when they go through the various factors, and concerning the political risk factor they say there is one negative: 'The European policymaking and political institutions, with which Italy is closely integrated',” he says. “And then they go on, saying, 'Nevertheless, we have not changed our political risk score for Italy. We believe that the weakening policy environment at European level is to a certain degree offset by a strong domestic Italian capacity'.”
The upshot is clear: Mr Monti's 60 days in office have been enough to convince the agency that his government is on a path of reform that could return the country to growth and shrink its debt levels, but that European Union mismanagement of the eurozone debt crisis is dragging down struggling countries, including Italy with its €1,900bn ($2,400bn) debt mountain.
The prime minister's endorsement of the judgment is all the more remarkable as it comes as many of his counterparts have spent the days since last Friday's downgrades condemning the analysis . Olli Rehn, economics chief at the European Commission, the EU's executive, regretted the downgrades and called them “inconsistent”, while other Commission officials intimated that S&P was improperly trying to inject itself into decision-making. Wolfgang Schäuble, German finance minister, opined that the rating agency had misunderstood how much progress had been made.
“I think I'm the only one in Europe not to have criticised the rating agencies,” Mr Monti boasts.
His challenge to European economic orthodoxy could mark a new, uncertain direction for management of the eurozone crisis. Until now, leaders in the single currency's debt-laden periphery who fell into the EU elite's “good student” category – Ireland's Brian Cowen, Spain's José Luis Rodríguez Zapatero, Greece's George Papandreou – were cast aside once they lost domestic political support.
But at 68, Mr Monti appears unwilling to play the good student and comes with the credibility and stature those others lacked. He spent 10 years holding two of the European Commission's most important economic portfolios – taking on Microsoft and General Electric as competition commissioner, after five years overseeing financial regulation and the EU's internal market – while the likes of Angela Merkel of Germany and France's Nicolas Sarkozy were still junior ministers.
His long résumé in Brussels may leave him vulnerable at home, where his lack of formal political allies and electoral mandate complicates his reform efforts, a point he readily admits. But that same international standing poses an unprecedented and potentially uncomfortable dynamic for high-level decision-making in Brussels, particularly since Mr Monti is seen – rightly or wrongly – as having been the EU leadership's preferred candidate to replace the troublesome Mr Berlusconi . He is, in that sense, a challenger from the inside.
[ Continue on http://www.ft.com/ ]
