ROME — As Prime Minister Mario Monti prepares to exit the stage, he has burnished Italy’s image — and his own — abroad, but he is less beloved at home. Italians are irate about higher taxes, while critics say that Mr. Monti failed to carry out the basic structural changes he said were needed, leaving a legacy more of austerity than growth.
While Mr. Monti passed tax increases, introduced a property tax, raised the retirement age and made changes to Italy’s labor laws, a host of bills aimed at limbering up Italy’s ossified economy have languished in Parliament, blocked by anxious lawmakers within his governing coalition.
But Mr. Monti, who arrived last year as a technocratic white knight whose mandate was to make the tough decisions needed to set Italy right, has struggled to stop them.
Even sympathetic critics say Mr. Monti did not do nearly enough with his mandate, especially in the first months of his government, when market pressures gave him more leverage over lawmakers who helped drive up the spending that got Italy in trouble in the first place.
“The labor market reform was under expectations,” said Tito Boeri, an economist at Bocconi University in Milan. “It didn’t do things it could do. It took very long to negotiate, and at the end brought very modest reforms.” He added that Mr. Monti was also “very timid” about liberalizing the guilds that serve as entry barriers for most professions.
That is largely because the parties nominally supporting his government were looking to save their seats and did not want to alienate their constituents. A bill that would have reduced the number of Italian provinces, eliminating a level of state spending and bureaucracy, was blocked in Parliament, as was a bill that would cut state spending on politicians.
“Paradoxically, the government of technocrats was blocked by the ‘technocracy,’ people in the public administration in Italy who have been there for years and who tried to make it hard for the government,” Mr. Boeri said.
Mr. Monti has said he has done the best he could with limited time.
It is not hard to understand Italians’ dissatisfaction. The austerity measures have exacerbated Italy’s worst recession in 60 years. Consumer spending suffered its sharpest year-on-year drop since World War II, according to Italy’s leading business association. Home sales were down 23 percent in the second quarter of the year compared with the same period last year.
Bank lending has plummeted and unemployment is at 11.1 percent, rising to 36.5 percent for young people, and experts say the figure may be even higher. Italy has one of Europe’s lowest employment levels, and some workers have been put on government-subsidized furloughs.
Much to Italians’ chagrin, the second installment of a new property tax came due just ahead of the holiday shopping season.
“This government has really given us a good thrashing,” said Rosaria Cistello, 62, as she worked at a laundromat in Rome. “Even the honest technocrat only managed to impose taxes on citizens, not to change the system.”
With growth prospects slim — Italy has not grown in two decades — some say Mr. Monti should have used the European Central Bank’s new bond-buying mechanism, which would have locked Italy into budgetary commitments set by the International Monetary Fund in exchange for the bank’s buying Italian bonds to keep interest rates down.
“Had we had an I.M.F. program right now there would be much less uncertainty,” said Lorenzo Bini Smaghi, a former member of the bank’s executive board. If the recession deepens, the credit crunch worsens and reforms stall, he said, Italy may need external help to service its debts in the future. Others say such help can be politically toxic.
With more economic turmoil ahead, it remains to be seen who will govern Italy after the elections. Although former Prime Minister Silvio Berlusconi startled markets recently by saying that he would run again, he now appears to be looking for ways to back out.
Nothing is certain in the political chaos, but it appears unlikely that Mr. Monti will run in early elections expected in February. Even if Mr. Monti were to decide to run, it is unclear what party he would ally with, since Italy lacks a mainstream center-right.
Lost in the theatrics is Pier Luigi Bersani, the understated leader of the center-left Democratic Party and a former economic growth minister who looks poised to win elections by a large margin. He is trying to forge an image as a reliable leader on board with Mr. Monti’s agenda.
But Mr. Bersani’s party, which is backed by Italy’s largest labor union, will have trouble governing without the help of centrist parties and the smaller Left Ecology and Freedom party, which does not agree with many of Mr. Monti’s neoliberal reforms.
“The most likely scenario today is that the Democratic Party with the Left Ecology and Freedom party will win both in the House and in the Senate,” said Roberto D’Alimonte, a political scientist at Luiss Guido Carli University in Rome.
There is wide speculation that instead of running for office, Mr. Monti, who will remain in Parliament as a senator for life, could replace Giorgio Napolitano, who is 87, as president of Italy.
“These are the most unpredictable elections in years,” said John Foot, a professor of Italian history at University College London. “It’s not worth trying to predict anything. You will just be proved wrong straight away.”
Most Italians long for stability. “The real issue with Italian politics is that no one has had a plan, a program for the past 20 years,” said Antonio Torda, 53, who owns a housewares shop in Rome.
Mr. Torda said he had “deep respect” for Mr. Monti, but wished he had passed some growth measures. Now, he said, “We need a political government that really makes decisions, takes responsibility for them and then asks the electorate whether they were right or wrong at the next turn.”
“Just regular democracy,” he added.
