Prime Minister Mario Monti said yesterday he was relaxed about Italy’s standing on international markets at a “crucial” time for the eurozone, despite rising crisis contagion.
The country’s high interest rates on its debt were not due to Italian factors
“We are relaxed over Italy’s standing on the international stage and on the markets,” he said in a speech to the Cabinet, adding that it was “a particularly intense and crucial phase for Europe and the country.”
Monti said that Italy had a lower public deficit and unemployment rate than many other EU countries, and “stable” banks which were not exposed to the real estate crisis threatening Spain.
The premier said that the country’s high interest rates on its debt were not due to “specifically Italian” factors and said they would ease if EU leaders adopt a “credible packet of growth measures” at a summit at the end of June.
While Monti managed to regain market confidence after taking over from Silvio Berlusconi at the end of last year, investor concerns have increased steadily in recent weeks amid fresh turmoil on the markets.
After Spain’s request for EU help to rescue stricken banks and ahead of a momentous vote in Greece which could see Athens leave the eurozone, Italy’s 10-year government bond yield leapt over the warning six per cent barrier.
In an interview with La Stampa newspaper yesterday, German Finance Minister Wolfgang Schaeuble tried to pour oil on troubled waters by insisting Italy was not in danger of getting pulled further into the eurozone debt-crisis.
“If Italy continues on the path Monti has set out on it will not be in danger,” Schaeuble said. The “road to sustainable growth through structural reforms, greater competitiveness and reduction of the deficit is the right one.”
He took a swipe at France, however, complaining that Paris was not measuring up to crisis-busting structural reforms, by allowing some workers to retire at 60 rather than increasing the retirement age in line with other EU countries.
“In Europe, we have decided to adapt our social protection systems to match demographic evolution. Our societies are all getting older. But President (Francois) Hollande’s decision does not correspond to that,” he said.
Schaeuble said he hoped the new and “particularly close” collaboration between Italy and France would give Monti the chance to act as a mediator.
Hollande travels to Rome today for preliminary talks ahead of a key four-way summit next week as Italy struggles to allay market fears that it may be next in the debt-crisis firing line.
Monti had stepped in to combat rumours of a contagion risk on Tuesday, insisting that Rome “will not need a bailout even in the future” and calling on the markets and financial observers “not to be governed by cliches or prejudices.”
Monti told German radio ARD: “I understand that Italy could have been associated with the idea of an undisciplined country in the past but now it is more disciplined than many other European countries.”