Monti Sells New Italy to Asia Seeking Investors
Italy's Mario Monti sets off to South Korea, Japan and China this weekend with crucial labor reforms in the bag, to set out his vision of a new Italy and boost ties with Asia's dynamic economies.
The prime minister, who in November replaced Silvio Berlusconi as premier as Italy toppled on the edge of financial meltdown, is wasting no time strengthening relations with Asia's key financial players.
"Monti has made this one of his first international trips and rightly so," Giuliano Noci of Milan Polytechnic told Agence France Presse.
"It has huge implications for Italy: trade deals made now will help put the country back on the map."
The former European commissioner's aim is to get recession-struck Italy growing again after years of lagging behind its eurozone peers.
He wants to see Italy eventually cut reduce its massive debt, which currently runs at 120 percent of gross domestic product: double the EU ceiling.
He has followed his tough "Save Italy" austerity plan -- which calmed skittish markets and defused the emergency atmosphere -- with a "Grow Italy" plan, which has included the deregulation of key sectors to spur competition.
His biggest challenge has been persuading trade unions to fall in with his reform to modernise the labor market.
He insisted on settling this issue with his cabinet before the start of his Asia trip. They approved it on Friday and it will go before parliament in the coming weeks.
Monti sets off on Sunday, and will travel first to South Korea to meet President Lee Myung-Bak and join leaders and top officials from 52 other countries at a Seoul nuclear security summit, before heading on to Japan.
There he will meet Finance Minister Jun Azumi on Wednesday before holding talks with heads of the country's main banks and financial institutions, after which he will head to China to meet top government officials and businessmen.
He will end his trip on Monday April 2 by addressing the Boao Asia Forum.
"Italy is the eurozone's third largest economy and doesn't want to miss out on deals being snapped up by others," said Sergio Romano, a columnist with Corriere della Sera.
"Monti has realized these countries need to be appreciated, understood and courted."
Noci said Monti plans to strengthen diplomatic and economic ties with Japan and the dynamic South Korea and ensure a series of lucrative deals made between Berlusconi and Chinese Vice President Xi Jinping in 2010.
He also said Rome would be looking to lure Asian investment into information technology, infrastructure, green energy and tourism -- and boost exports of luxury fashion goods to a region with a passion for Prada shoes and Gucci bags.
Trade between Italy and China is expected to reach $80 billion (60.3 billion euros) by 2015.
Official figures this week showed that Italy's shipments to China declined by 4.8 percent in February and Monti will be keen to quickly reverse the trend.
Italian media have referred to the upcoming visit as a "road trip to show off the new Italy," and Monti's plan is for Rome to compete with eurozone countries such as Germany and France.
"We are now seen as real protagonists of the eurozone's recovery and can offer all the advantages of a country which in just a few months has cleaned up its act," Foreign Minister Giulio Terzi told Il Sole 24 Ore financial daily.
Italy "is an attractive option for foreign investors who can benefit from liberalizations, less bureaucracy, tax breaks and the labor reform," he said.
But Noci warned that the work reform -- which will be modified by ministers before the draft bill it goes to parliament -- is not a done deal.
Monti should be wary of using it has his trump card in Asia, he said.
"The reform is not wrapped up yet, it's still piping hot, but Monti couldn't pass up his trip to Asia," he said.
"He will have to hope that his reputation as an astute economic thinker who has turned Italy around precedes him."
Source: Agence France Presse
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