Italy’s much-mocked fi­nance chief may get last laugh on bud­get

Gulf Times Business - - BUSINESS -

Italy’s pop­ulist rulers love to beat up on 70-year-old fi­nance minister Gio­vanni Tria for re­sist­ing their ef­forts to buck Euro­pean spend­ing rules. But the slight, unas­sum­ing eco­nomics pro­fes­sor, who’s been par­o­died as a hap­less hostage on TV, may get the last laugh.

De­spite fre­quent re­ports that Tria is con­sid­er­ing quit­ting in frus­tra­tion at the abuse he gets from coali­tion col­leagues, the minister is committed to strik­ing a com­pro­mise that will be ac­cept­able to pop­ulist lead­ers while keep­ing Italy in good stand­ing with the Euro­pean Union.

Fail­ure to reach a deal could roil fi­nan­cial mar­kets and even­tu­ally lead to fines from the bloc.

Backed by es­tab­lish­ment fig­ures and pres­sure from in­vestors, Tria has been qui­etly lob­by­ing deputy pre­miers Mat­teo Salvini and Luigi Di Maio to yield to EU de­mands they curb the spend­ing plans that helped them get elected. Their cur­rent bud­get fore­sees a 2.4% deficit next year, which Brus­sels finds un­ac­cept­able, while Tria has been ar­gu­ing for a max­i­mum of 2%, ac­cord­ing to two se­nior of­fi­cials in Rome who asked not to be iden­ti­fied dis­cussing pri­vate con­ver­sa­tions.

Tele­vi­sion comic Mau­r­izio Crozza has picked up on Tria’s ob­vi­ous iso­la­tion within the ad­min­is­tra­tion to por­tray him as a des­per­ate, bum­bling minister who clearly doesn’t be­lieve a sin­gle word he’s forced to tell re­porters.

But be­hind the scenes, the real fi­nance minister has been reach­ing out to Euro­pean Eco­nomic Af­fairs Com­mis­sioner Pierre Moscovici to lay the ground­work for the deal that may avoid a show­down with the EU, ac­cord­ing to an ad­viser and long­time friend, Pasquale Lu­cio Scan­dizzo.

Italy is now “on the right path” to­ward craft­ing a solid bud­get, Moscovici said Fri­day. “I want to avoid a cri­sis be­tween the Euro­pean Union and Italy.”

Build­ing on pre­vi­ous re­ports, Cor­riere della Sera said yes­ter­day that Tria is in­creas­ingly iso­lated by coali­tion gov­ern­ment part­ners.

Tria, a first-time minister in a coun­try that’s had 66 gov­ern­ments since World War II, needs a thick skin - he’s a key rep­re­sen­ta­tive of the ca­reer civil ser­vants and political old guard try­ing to steer the coun­try through the mine­field of a pop­ulist ad­min­is­tra­tion.

Tria’s ad­van­tage in ne­go­ti­at­ing is that “he never gets car­ried away by emo­tions,” Scan­dizzo said. “He’s de­ter­mined, calm and cold-blooded.”

An­gered by years of eco­nomic stag­na­tion, a wave of im­mi­gra­tion from North Africa and a gen­eral sense of de­cline, vot­ers ditched the tra­di­tional par­ties in March’s elec­tion in fa­vor of Salvini’s anti-mi­gra­tion League and Di Maio’s anti-es­tab­lish­ment Five Star Move­ment. Their tus­sle with the EU has whip­sawed fi­nan­cial mar­kets for weeks.

The new gov­ern­ment’s big­gest test is its first bud­get, which Salvini and Di Maio need in or­der to start de­liv­er­ing on their elec­tion prom­ises. But a spend­ing push to pay for wel­fare ben­e­fits, low­er­ing the re­tire­ment age and tax cuts has been re­jected by of­fi­cials in Brus­sels for vi­o­lat­ing the union’s bud­get rules.

Back in May, when the new gov­ern­ment was still be­ing formed, Tria emerged as a com­pro­mise can­di­date to re­solve a stand­off when Pres­i­dent Ser­gio Mattarella re­fused to name a euro-scep­tic, Paolo Savona, as fi­nance minister.

Savona him­self sug­gested Tria, which was good enough to con­vince Five Star and the League, peo­ple fa­mil­iar with the mat­ter said.

The back­bit­ing hasn’t been easy on the sep­tu­a­ge­nar­ian. In a text message that Il Gior­nale news­pa­per said Tria had sent a friend, the minister said he can’t take the pres­sure of “be­ing sub­jected to one am­bush af­ter an­other” any­more.

But he also said that he’s committed to a sin­gle ob­jec­tive: “sav­ing the coun­try.” When asked about that re­port in Venice on Fri­day, Tria told re­porters: “There is no message.”

Tria has re­peat­edly de­nied re­ports that he in­tends to re­sign ei­ther right away or af­ter he gets a bud­get deal done by the end of De­cem­ber. Those claims have sur­faced with some reg­u­lar­ity since his first month in the cabi­net.

“I’m not masochis­tic, putting up with the bud­get to then re­sign af­ter­wards,” Tria said af­ter one such re­port, in Oc­to­ber.

A few weeks ear­lier, Di Maio all but or­dered Tria to find the money needed to pay for the elec­tion prom­ises of the political up­starts now run­ning Italy. “Ital­ians who are in dif­fi­culty can’t wait,” the deputy pre­mier said at the time. “A se­ri­ous minister must find the money.”

Tria isn’t alone in his de­fence of political mod­er­a­tion. Flank­ing him are sev­eral fig­ures work­ing be­hind the scenes to keep Italy’s fi­nances and its re­la­tion­ship with the EU on a more even keel – the likes of Pres­i­dent Mattarella, Bank of Italy gover­nor Ig­nazio Visco and For­eign Minister Enzo Moavero Mi­lanesi.

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