Monti takes on lobbies in fight to modernize Italy

By Victor L. Simpson

Associated Press

Published: Wednesday, Feb. 1 2012 12:00 a.m. MST

Like in the Middle Ages, professions are handed down from generation to generation within the family, reflecting both tradition and the lack of social mobility that Monti wants to address. And Italy has remained stubbornly provincial, with regional quotas on notaries, taxis and pharmacies.

While commentators have hailed Monti's program as revolutionary, many working men and women have rejected his ideas, reflecting the difficulty of change in this highly conservative country.

"Monti sounds good, he wants to spur employment by giving out more taxi licenses," said 62-year-old Mario Parisi as he drove his cab across the Tiber River in Rome. "But more work for others means less work for me and I am only making €2,000 a month."

The voice of business, the newspaper Il Sole 24 Ore, is praising Monti's efforts, pointing out that "in less than 20 words" — the length of his edict on bakeries — the government has changed the history of business in Italy by allowing breadmakers to work seven days a week.

So far, at least, the reform package appears to be proving popular with the public. A survey published this week in the leading Corriere della Sera shows Monti with a 57 percent approval rating. The margin error on the telephone poll was 3 1/2 percent.

Monti has remained remarkably impervious to public and political pressure. The technocrat has made clear that since he was not elected, he does not have to pander to voters or parties seeking favors, while keeping an open door to the sectors he is seeking to reform.

After meeting with taxi drivers, the government did compromise on some measures. For example, if more licenses are issued, drivers who already have one will receive "tangible" compensation.

A new government authority will decide city by city whether the number of taxi licenses should be raised or reduced, instead of issuing one rule for all. That already gives wiggle room for the powerful taxi lobby to fight for the status quo.

Still, Monti has stood firm on the idea that removing privilege and opening sectors to greater competition can spur the economy.

Growth — which in Italy has been stuck at zero for a decade — is viewed by economists as the best way to bring down Italy's dangerously high public debt of €1.9 trillion, or 120 percent of GDP.

Italy is expected to enter a recession this quarter. The International Monetary Fund forecasts the Italian economy will contract in 2012 by 2.2 percent, while the Confindustria industrial lobby puts the shrinkage at 1.6 percent.

One of the most corrosive effects of the pervasive clubbiness of Italian industry has been the way it keeps young people out of work. Italy is increasingly known as a gerontocracy that entrenches older generations in plum jobs. The nation has suffered an alarming brain drain as talented young people move abroad in search of work. One Italian in four under 30 is not studying, working or in training.

"More competition also means more opening, more space for the young, less space for privilege and more recognition for merit," Monti told a press conference announcing the reforms. "It is not just a big economic operation, but also a big social action."

But most Italians, for the moment, are worried about losing what they have — not about the possible longer-term gains of painful reforms.

A new study produced by the Bank of Italy indicates that Italian families are poorer than just two years ago, and also carry more debt.

Monti refuses to place all the blame on the politicians who preceded him.

"Are we citizens doing our duty to help Italy grow?" he recently asked.

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