Messages in the Media - University of Toronto

as acquiescing to the European Commission’s demands
at the expense of its own citizens. The European Commission
applauded Italy for implementing the legislation,
as did many at the EU headquarters in Brussels. 35
The implementation of the legislation was seen as a
firm commitment by the Italian government to diminish
its public debt and combat the Eurozone crisis.
2011 IN REVIEW:
Given the dire state of the Italian economy over the
past year, it is unsurprising that the country received particularly
harsh criticism from the EU over its need to reform
its economy and refinance its debts. As Europe’s
fourth largest economy, the possibility of an Italian bankruptcy
was seen as particularly worrying, as there was a
very real possibility that it would lead to a collapse of the
Eurozone. Due to the size of the Italian economy, the EFSF
was unlikely to have the capital necessary to fund an Italian
bailout. Core Eurozone states, such as France and Germany,
had already shown their reluctance to fund the bailout of
much smaller economies, such as that of Greece and Spain.
It quickly became apparent that the solution to Italy’s financial
woes would involve internal financial reform and
austerity measures. Given the political stalemate that characterized
Italian domestic politics, and mounting accusations
of political scandal against PM Berlusconi, the implementation
of these measures proved to be increasingly
problematic.
PM Berlusconi was forced to resign on 12 November
2011 after losing his parliamentary majority; he was
replaced by Mario Monti, a former member of the European
Commission, and his government of technocrats. PM
Monti quickly stabilized the Italian financial system as he
implemented measures proposed by the ECB to help Italy
reduce its $2.6 trillion public debt and increase its economic
growth. Although the Italian public resented the austerity
measures, they accepted them as a necessity in order to
ensure the country’s sound economic recovery and the
maintenance of its position of influence in the EU. The Eu-
107