At this moment, Mario Monti is the world's most important ex-economics professor. True, Ben Bernanke's monetary-policy decisions will move the needle in the U.S., but the fate of a continent rests on Monti's shoulders. If he can continue to institute meaningful reform, Europe will successfully weather the debt crisis. If he cannot, the vision of a unified Europe will unravel.
Already he has pulled Italy from the ledge by standing up to vested interests — taxi drivers, pharmacists and railway workers — to increase competition and renew economic vitality. Instituting these reforms took great courage, particularly in a country where leaders have too often proved beholden to powerful lobbies. He has taken painful steps to cut spending, raise taxes and reduce Italy's budget deficit. As a result, the nation's bond yields have tightened significantly, and imminent fears about the monetary union's collapse have subsided.
Monti, 69, knows that growth is what is most important. Reforming Italy's two-tier labor system to foster such growth will be his most arduous task. However, given the courage and dexterity he's displayed thus far, I trust that he's up to the challenge. The stakes could hardly be higher.
Summers is a former Treasury Secretary and current professor at Harvard University