But while international observers may at first have been reassured by the government’s draconian austerity measures, Monti met fierce resistance at home from powerful trade unionists and was increasingly forced to compromise.
An attempt to bust open small business lobbies and liberalise professions sparked widespread protests among taxi drivers, truck drivers and pharmacists and Monti was forced to back peddle somewhat on the bid to reduce protectionism.
Critics said he did not go far enough on dealing with the duality of the labour market — leaving Italy’s younger workers struggling to hold down jobs — and should have fought harder for deeper cuts in public spending.
The economy has also remained in recession despite Monti’s “Grow Italy” agenda — it is forecast to contract by around 2.5 percent this year and is unlikely to return to growth before the end of 2013 or the beginning of 2014.
Youth unemployment has also hit a record height of 36.5 percent, sparking months of protests among students which culminated in teenagers in schools across Italy barricading themselves in their classrooms for weeks on end.
Giacomo Marramao, politics professor at Rome’s University III, said Monti’s success with the markets was undermined by “excessive taxes, which have had a big effect on consumption,” as households were forced to tighten their purse strings.
Monti has said that Italy was forced to swallow “a bitter medicine” because “an aspirin” was not enough after years of mismanagement of public finances, but a highly unpopular housing tax in particular hit Italian families hard.
“It’s not just a contraction, it’s a real debacle. We forecast a 12 percent drop in consumption, now we’re heading towards 20 percent,” said Rosario Trefiletti, head of the Federconsumatori Italian consumers association.
The International Monetary Fund, while calling on Monti to continue with the reforms already underway, urged the government to “revive growth quickly.”
There are many who would have him stay on as a finance minister or the leader of the next government, to ensure stability in a country not yet clear of the debt-crisis shadow and carry out reforms he has not had time to enact.
But at home, Monti’s popularity ratings have plunged from more than 60 percent shortly after he took over to around 30 percent in recent weeks, and there are calls for a Italy to be allowed to breath after the biting austerity.
“Painful cuts, an exhausting climb back up… Italy is miraculously still standing, but we don’t know how,” La Stampa newspaper said.
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