Meeting ‘debtlines’: Uphill battle for new euro PMs

The new number-crunching leaders in Greece and Italy are getting their teeth into their countries' financial problems. But while they are struggling for recovery, Europeans are not convinced the monetary maestros can pull it off.

­In Rome, Prime Minister-designate Mario Monti says he is sure Italy can get back on track and he will announce his cabinet later on Wednesday.

He secured support from Italy's main political forces, but has a massive task ahead to cut almost 2 trillion euros of debt.

Meanwhile in Greece, time is of the essence with the finance minister warning the EU rescue package needs rapid ratification, to stop the country going under.

Greece's new leader used to be vice president of the European Central Bank.

Italy's new premier is also an ex-banker, and adviser to Goldman Sachs. To some, Mario Monti's first actions in charge prove he is there to help fellow bankers, not his people.

“Monti – one of the first things he said is that ‘the main goal's financial stability. But of course we will take care of social problems.’ That is just double-speak. Here is a government led by a banker, he was not elected in the first place and he is not going to seek re-election. He can do whatever he pleases without having defeat. He is just going go back to his previous post after two or three years,” former deputy speaker of the Belgian Parliament, Lode Vanoost says.

But that suits the EU, says the Institute for Democracy and Cooperation's John Laughland. Brussels has put in two men who will continue with the bank bailouts, and not support the public the way their predecessors did.

“Papandreou had to leave office the moment he suggested the referendum on the debt package. And Berlusconi had to leave office the moment he said that Italians had become poorer under the euro,” Laughland says.

The EU is thought to have insisted on unelected leaders taking charge in Italy and Greece, after the incumbent prime ministers questioned the reforms being imposed on them. But that has exposed Brussels to charges of being dictatorial and undemocratic.

One politician thinks this is a warning to all EU leaders who try to help their population. Oppose our spending cuts and you will have to go.

“If it can be done in Italy and it can be done in Greece, it's a matter of time before it can be done elsewhere,” says Belgian MP Gerolf Annemans.  

Yet financial analyst Max Keiser thinks bankers are the very worst sort to put in charge at this time.

“People say the bankers know best. But the bankers are the ones who have stolen all the money, so are we going to give them more ability to steal more money and impose more austerity measures? But that is insane,” Keiser says.

There are signs the EU may have gone too far, with anger boiling over at savage austerity measures demanded by Brussels. Seventy people have been injured in protests in Italy, while Greek civil servants and teachers walked out of their jobs on Tuesday over wage and pension cuts.

Athens is gearing up for more violence at another public demonstration on Thursday.

Johan Van Overtveldt, editor-in-chief of two Belgium’s leading business magazines told RT the eurozone is in a lot of trouble, and this has to do with several elements.

“The first is that we still face the situation where the structural handicaps of the monetary union are not cured. We don’t have a political union and everybody should know that it is impossible to have a monetary union that works well without a political union,” he stated. “Secondly, there is the crisis of public finances – practically all EU members are in the longer term on the crash course with their public finances. And this is the case for countries like Belgium and France – that’s what makes markets nervous,” Van Overtveldt added.

He also maintained that the best way to resolve the crisis is to take a “quantum leap”, as Mario Draghi, the new president of European Central Bank described it.