"Europe Needs to Care More About Soft Power"

Mario Monti believes worst of crisis has passed

08/10/2013 Barcelona

Mario Monti

Mario Monti: "The Worst Part of the Crisis Is Over"

The worst of the eurozone crisis is over, Mario Monti, the former Italian prime minister and European Commissioner, told an IESE meeting on "The Future of Europe and Its Influence in a Global World." All the necessary instruments that weren't there at the beginning have been put in place, he said, citing firewalls, steps toward greater banking union, the fight against corruption and a restructuring of labor markets. If Europe doesn’t start to think and act beyond its borders, it could lead to the disintegration of Europe itself. http://www.iese.edu

"Europe has played an influential leadership role in the world on the few occasions when it has been allowed to, in trade and competition," Mario Monti, the former Italian prime minister and European Commissioner told a special Continuous Education session on October 7 on IESE’s Barcelona campus.

The session, titled "The Future of Europe and its Influence in a Global World," was held to mark the 50th anniversary of the Zegna Group. Ermenegildo Zegna, the group’s CEO, also spoke at the meeting, which was introduced by Dean Jordi Canals.

Monti said he believes that the worst of the Eurozone crisis is over. Italy had made advances on budgetary discipline but, unlike Spain, has not tackled employment reform. "In Italy we almost produce the youth unemployment that we want to avoid because we have labor market rules that give the advantage to insiders and exclude others," he said.

The former prime minister said that Europe needs more growth-creating policies but that Germany is wary of such policies. "For Germans growth is the reward for virtuous economic behaviour," he said, adding that this admirable attitude made them suspicious of any financial instrument that involves debt. In German the word Schuld means both guilt and debt, he said.

He spoke of his admiration for Angela Merkel, the German chancellor, and said that although her slow approach "was painful for us, at least it didn’t create a gap between the German government and the German public. She has been able to quash populism."

He said that Europeans thought for a while that they were immune to the financial crisis that was made in America, but they were not. However, Europe "has made great steps in acquiring the instruments it needs. Of course, if it had had them before there wouldn’t have been a crisis."

Returning to the topic of European influence in the world, he said that when he was prime minister he was surprised how interested the president of the U.S., as well as Japan and China, were in Italy when it was going through the worst phase of its recent financial crisis. They were both interested and self-interested, as what happens in Europe affects the rest of the world, he said.

Europe needs to care more about soft power, he concluded. "Europe can have influence in inspiring the rest of the world through example.