Italy’s Finance Minister quits EU talks early to rush home

Italy’s Finance Minister Giulio Tremonti yesterday quit talks with his EU counterparts before they closed saying he needed to work on austerity plans for the country.

“I am returning to Rome to complete my austerity plan,” he told journalists as finance ministers from the 27 nation European Union discussed ways to stem a debt contagion crisis threatening Italy and the euro.

The Italian government earlier this month announced a four-year austerity budget worth €40 billion in a bid to reduce the budget deficit to just 0.2 per cent of output by 2014 from 4.6 per cent last year.

Italy has become the new pressure point in the eurozone debt crisis and the Milan stock exchange shed more than four per cent shortly after opening yesterday.

Growing prospects of a Greek default have provoked a sharp rise in Italian as well as Spanish rates on the bond markets, with Italy particularly exposed due to one of the highest public debt levels in the world and one of the lowest growth rates in Europe.