Monti to Unions: new labor market rules need to favor economic growth

Therefore the reforms of European governance today become fundamental: «a quick improvement in governance could reduce interest rates making more sustainable and politically more feasible also the continuation of the internal effort to shore up the single Countries.»
It is up to Europe, therefore, not to ease internal efforts but to strengthen them, to help the single Countries, starting from Italy, to continue doing their job. Monti will never say so before sitting at the table with Angela Merkel, but obviously this is the reasoning that he will bring forward in his talks, convinced that he will be able to overcome this way German fears that the European initiative could in fact induce Countries at risk to ease their efforts.

But what are Europe's priorities? What does Italy expect from Brussels to favor the hoped for interest rate reduction and to overcome the most acute phase of the crisis of the euro area? There are essentially two chapters: the so called firewalls, or the strengthening of the mechanisms to prevent the debt crisis from spreading; and European measures for growth.

On the first front eyes are more than anything on the ESM, the bail-out fund, «that has to become operational in a short and certain period of time and that has to be based on lean procedures so that it can actually be used.» But there is also a lot of attention on the budgetary discipline plan approved December 8th, which in fact has to reaffirm «the good job done by the Council and by the European Parliament on the six-pack, without racing forward with further hardenings of positions that are not needed and that we will not accept.» On budgetary discipline what has already been decided has to be implemented, therefore including the consideration for «relevant» factors, from pensions to the primary surplus, which can give breathing room to Italy, without adding further tighter policies.

Also because there is the second front to bring forward: growth, «which is essential for employment as well as for the budgetary discipline.»
Monti here identifies two roads to follow: the strengthening of the single market, accelerating the implementation of the single market act, but more importantly «a plan to give Europe adequate infrastructures, a large transportation and communication network, starting from broad band.» How should this be financed? «With project bonds» or bond issued by Europe aimed precisely at infrastructure investments. What about Eurobonds as a way to manage debt? The Prime Minister is in favor, but he also knows that «there are significant differences of opinion on this in Europe» «therefore it is not an instrument that we can think of betting on in the short term.» In essence, it should not be ruled out in the future, but for now it is useless to clash again with German resistance.

©RIPRODUZIONE RISERVATA