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    Italy: Super Mario Not Living Up To His Name

    Who would want to be Mario Monti right now after the university professor became Italy, and indeed Europe's, new hope when he succeeded the controversial Silvio Berlusconi as Prime Minister last November?

    He's a quiet man but a tough negotiator with none of the flamboyance of his predecessor - a technocrat to stabilise the wobbling Italian economy. He came with the nickname 'Super Mario'.

    But his popularity nationally and internationally is souring. When he took office his approval rating was above 70%. A recent poll puts it now at 33%. Ouch!

    Italy is still in a fragile state, despite Mr Monti's eight months in charge.

    Its problems are often over-shadowed by those of Greece and Spain, but its almost 2trn euro of outstanding debt makes it the most indebted European country - and the growing uncertainty that now surrounds Mr Monti's leadership is causing much unease amongst investors.

    Not least because Italy has to refinance more than 200bn euro of debt later this year - no easy task, especially with 10-year borrowing rates fluttering around the 6% mark.

    As the foreign exchange broker FxPro recently pointed out, Italy's debt mountain dwarfs that of Spain by a ratio of 5:2.

    Imagine then if it needed a full-scale bailout - not beyond the realms of possibility.

    One of Mr Monti's tasks has been to reform labour regulations, making it easier for companies to sack workers whilst trying to encourage more full-time work.

    These changes are still being tediously thrashed out in the Italian parliament and show no sign of being approved any time soon.

    Unemployment is now close to 10%, nowhere near that of Greece or Spain's but significant, painful and too high nonetheless.

    He has also introduced a severe austerity package that has included 24bn euro of new taxes - it's as unpopular as it is necessary.

    This lack of achievement hasn't endeared the Italian PM to European officials either and there is a sense that he's talking a good game on the international stage but failing to deliver at home.

    However, of all the gathered leaders at the G20 in Mexico , it was a suggestion from Mr Monti that perhaps gained the most headlines.

    He mooted the idea that the two European bailout pots (the EFSF and soon to exist ESM) should be used to buy the sovereign bonds of countries experiencing high interest rates: namely Spain and Italy.

    Nothing has been formalised yet and Germany appears to be lukewarm on the idea, but it has gained credibility not least because of the widespread briefings given to journalists in Los Cabos - a tactic perhaps deliberately employed to pressurise Angela Merkel into accepting it.

    Mr Monti's argument, which has support from his equally beleaguered Spanish counterpart Mariano Rajoy, is that Spain and Italy have taken significant steps to improve their respective economies and therefore don't deserve to be subjected to conditions set down by the EU/IMF troika in event of a bailout.

    He argues that an intervention by the EFSF and ESM in this manner would be a way around that.

    French President Francois Hollande has suggested his support, but the scepticism amongst other leaders about what Mr Monti has really achieved in Italy won't help his case.

    Europe, and by that read Ms Merkel, might not have a choice though. The German leader is showing signs of waning influence - in Mexico she was bullied by non-Eurozone leaders keen to see some action from her.

    The eurozone's problems are starting to have an effect outside of the single currency area.

    But it won't be external pressure that forces the German chancellor to act. Instead it might be the prospect of elections in Italy should Mr Monti's rivals try to force him out - Europe doesn't need further political uncertainty right now.

    Worse than that is the prospect of an Italian bailout - such an event could be curtains for the euro.

    Mr Monti's plan will be discussed further in Rome today when he hosts a meeting with Ms Merkel, Mr Hollande and Mr Rajoy. It will almost certainly be on the agenda again in Brussels at the EU Leaders' Summit next week.

    Some commentators believe Mr Monti needs to win approval for it in order to save his leadership as well as the Italian economy.

    Super Mario needs to start living up to his name.