ROME — In the news media he is known simply as “Super Mario.” But Mario Monti, the new leader of Italy’s new government, which is being formed amid a crisis that threatens the European monetary union itself, will face a strong challenge in living up to his admiring nickname as he tries to steer his country from the brink of economic turmoil and through the machinations of Italian politics.
The consensus in Italy is that President Giorgio Napolitano, who nominated Monti in record time Sunday to replace departing Prime Minister Silvio Berlusconi, had chosen judiciously, picking an economist with strong European credentials and longstanding familiarity with Europe’s power brokers.
It remains to be seen, however, whether Monti — who has no hands-on political experience at home — can convince financial markets that he can overcome Italy’s snarled domestic politics and implement the cost-saving measures that Italy has promised to whittle down a mountain of debt and boost growth.
“Mr. Monti brings credibility and legitimacy, but also the notion that if he fails and his efforts fail, everyone will be worse off,” said Moises Naim, a senior associate in the international economics program at the Carnegie Endowment for International Peace in Washington, who knows Monti. “The bottom line is that Italians have lost their alibi once Berlusconi is gone and the hard work starts; there are no excuses any more.”
Monti, 68, is as much an outsider to Rome’s political palazzi as he is at home in Milan, where he taught political economy and is president of Bocconi University. He is also at home in Brussels, where he spent more than a decade as a member of the European Commission, first for the internal market and then for competition.
“He was really shaped by the two portfolios he held at the Commission, which are the fundamental pillars of the EU,” said Jean Pisani-Ferry, director of Bruegel, an economics research institute in Brussels. Monti was Bruegel’s first chairman and is now its honorary president.
Monti’s tenure as commissioner for competition coincided with an eventful time in European Union antitrust enforcement and control of market concentrations. He also worked with U.S. authorities to create the International Competition Network.
He blocked the $42 billion merger of General Electric and Honeywell and fined Microsoft $650 million for antitrust violations. He also ordered seven German regional public banks to repay more than 3 billion euros in illegal subsidies they received from their regional governments in the 1990s. “He was not afraid to take on iconic businesspeople like Jack Welch,” General Electric’s former chief executive, said Nicholas Levy, an antitrust lawyer at Cleary Gottlieb Steen & Hamilton, who dealt with Monti on several occasions.