Italian politics: Monti's battle for survival NONE of the leaders who gathered in Brussels at the European Union (EU) summit - not even Angela Merkel or Mariano Rajoy - stood to lose as much from the outcome (and the markets" reaction to it) as Italy's Mario Monti. Even in the case of a fiasco, neither the German chancellor nor the Spanish prime minister stood to lose their jobs. Mr Monti did. When he was appointed last November, it was to restore Italy's credibility on international financial markets, whose mirror image is the spread between Italy's benchmark government bonds and their German equivalents. As Mr Monti's non-party, technocratic government rammed through stiff tax increases and a bold pension reform, the spread almost halved. But it has been climbing back since March, and by the start of the summit was around 460 basis points (see chart). The very number that brought Mr Monti into office was threatening to drive him out. Small wonder Italian officials have been pressing since before the Los Cabos G20 summit earlier this month for a scheme to allow the EU's state bail-out fund, the EFSF, to intervene on the primary - and preferably secondary - government-bond markets. To make intervention credible, the Italian government has also been seeking to get the bond purchases leveraged by the European Central Bank. "We cannot let the markets open on Monday without something substantial," Mr Monti said shortly before leaving for Brussels. He took with him two arguments to deploy against Germany's predictably wary chancellor. One was moral and explicit. "The Italian people have made a lot of sacrifices," the prime minister said. They knew the reward in terms of higher growth would take a long time. But they hoped the pay-off, in the form of lower interest rates, would be faster. The other argument was practical and maybe implicit. A rising spread allows Mr Monti's critics to argue the change of government seven months ago was futile. And it seems to be tempting Silvio Berlusconi, Mr Monti's predecessor, into thinking it could be reversed. Without the support of the People of Freedom movement, founded by Mr Berlusconi, the present government cannot survive. On June 22nd the former prime minister mused in public for the first time about a comeback. The idea that Mr Berlusconi, who is on trial for paying an underage girl for sex and who bears a heavy responsibility for Italy's economic plight, could return to office may seem unimaginable outside Italy. But with his almost bottomless reserves of cash and patronage, he has made the unthinkable happen more than once. Assuming, no doubt correctly, that Mrs Merkel would be appalled by the prospect of Mr Monti's departure, several Italian commentators concluded he would threaten her with it to get what he needed. Yet blackmail is not part of the armoury of this courteous economics professor. Even some of Mr Monti's ministers accept privately that one explanation for the widening bond spread is a gradual loss of the government's reforming momentum. The government has liberalised and simplified with great zeal. On June 27th, minutes before leaving for Brussels, Mr Monti signed a hard-fought reform of the employment laws. Even so, the employment-law reform, along with several others, has been watered down by the parties that give Mr Monti's technocrats their parliamentary majority. And, to the frustration of the premier's admirers, he has shrunk from using what was once the most powerful weapon at his disposal: threatening resignation and leaving the politicians to take the blame for a bond spread that would have spiralled out of control. Now the moment has passed. Not only has the spread risen again, but the government's popularity has fallen. A recent poll indicated that less than a third of Italians thought it was doing a good job.