Economics

Mario Monti’s Nordic Dream

Jun 6, 2012 Fabrizio Tassinari

As the EU’s top competition official a decade ago, Mario Monti was regarded as a very Anglo-Saxon regulator. Today, he is the most Nordic prime minister that Italy has ever had – in a country where politics and society remain anything but Nordic.

ROME – Mario Monti, Italy’s prime minister, is a self-styled German among Italian economists. As the European Union’s top competition official a decade ago, he was regarded as a very Anglo-Saxon regulator. Today, he is the most Nordic prime minister that Italy has ever had.

At the outset of his premiership six months ago, Monti declared himself to be an admirer of all things Danish – the country’s “society, economy, and civility.” The measures that he has introduced since coming to power – from pension reform to combating tax evasion – have displayed the rigor and transparency that one associates with northern European countries.

Likewise, Monti has repeatedly said that he is inspired by Scandinavia’s labor-market and social-protection arrangements. The Swedish home-furniture giant Ikea’s recent announcement that it will open two new plants in northwest Italy suggests that Scandinavians are taking note of Monti’s Nordic tastes.

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Nils-Göran Areskoug Feb 8, 2013

A Counterpoint from Stockholm.

The egalitarian model of the Nordics does not imply wealth equality but only relative income equality. The latter is a prerequisite for the well-functioning social protection system, so much admired here by Monti and Tassinari. The relative income equality achieved by modest salaries among managers and a Scandinavian tax system that effectively levels off unmotivated excesses among top earners (even mitigates some excessive greed) seems fully capable of contributing to the sustainability of the Nordic societal model.

But wealth disparity is another thing. Wealth in the Nordic countries is built not so much by a long-standing stream of high income cash flows among high earners (as in US); instead it accumulates as savings from value growth and results from excellence in performance among skilful entrepreneurs who need their capital to invest and promote further growth.

This is the core of the Nordic model which in a distinct way combines a unique social safety net with policies that strongly promote business innovation and dynamic growth. But such a model is, as Tassinari correctly suggests, deeply rooted in culture and mentality – and reflected in the high level of trust among Nordic peoples.

I agree it would be difficult, if not entirely impossible within short and medium term, to implant the Nordic model “onto” Italy and even more so to get it anchored deep “into” its society. However, an effort to reinvigorate own ideals and values deep down in the rich Italian cultural history should not be impossible – even if it might provoke some resistance among some populist groups.

After having experienced Rome and one of its marvelous cultural institutions I am convinced that currents of strong cultural values are persistent even in times of crises, not the least in Italy with its rich heritage of ancient arts.

To rely on these values, cultivate them, disseminate them, and get people committed to a great call, would help restoring the (forgotten and deep-rooted) strengths of a great nation that presently needs to mobilize with utmost determination its past in the pursuit of its near future.
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Paolo Magrassi Dec 29, 2012

People, including our excellent author here, are always impressed by headlines saying that «the combined wealth of the ten richest Italians equals that of three million of their poorest countrymen». However, if you replace «Italians» with just about any other nationality (including Swedish: http://alturl.com/kuas6), the statement will still hold true, with little variations. Anyone reading these lines is probably wealthier than a million or so of their fellow countrymen: this happens because a lot of people have no savings or have debts offsetting their savings. Income and wealth inequality are serious issues, but we shouldn't approach them from a superficial angle.
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Asgeir B. Torfason Jun 8, 2012

Coming from the Nordic it is worth pointing out that there has been an ongoing a bank crisis in Denmark for the last couple of years, with 10-20 banks in bankruptcy situation. But the Danes are handling it admirably, with the fourth special bank legislation since 2008 and an effective resolution process, so it goes more or less unnoticed.
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