EU must recognize Italy's debt crisis efforts: Monti

Reuters News
Posted: Jan 10, 2012 7:18 PM
EU must recognize Italy's debt crisis efforts: Monti

BERLIN (Reuters) - The European Union must recognize Italy's efforts in fighting the sovereign debt crisis or risk the third-largest euro zone economy falling into the hands of anti-EU populists, Italian Prime Minister Mario Monti said in an interview.

Monti, who took office less than two months ago at the head of a technocrat government, told the German daily Die Welt that he was asking Italians for big sacrifices.

"The problem is, however, that despite these sacrifices we do not see concessions from the EU, such as in the form of lowered interest rates," Monti was quoted as saying in Wednesday's edition.

"I cannot be successful with my policies if the policies of the EU do not change. If that doesn't happen, Italy -- which has always been a pro-European country -- could flee into the hands of populists."

Italy has been at the centre of the debt crisis since last summer when its borrowing costs began to approach the levels which forced Ireland, Greece and Portugal to seek international bailouts.

As it faces a recession this year, which will make it even more difficult to rein in public debt, Monti's government is drawing up a set of "Grow Italy" measures aimed at making the sluggish economy more competitive.

Monti, who meets German Chancellor Angela Merkel in Berlin on Wednesday, is seeking a united response from euro zone countries to the debt crisis and aims to coordinate a push for growth among euro zone members.

Concern over Italy may have led the French and German leaders to strengthen ties with Monti. He met Sarkozy in Paris last week, and the three meet again in Italy on January 20, before a January 23 EU finance ministers meeting and a January 30 EU summit.

Monti said Franco-German cooperation was crucial for the EU to develop, but the two countries could not go it alone. "It's not enough, especially in an EU of 27," Monti said.

Monti called the breaches of the Maastricht Treaty limits on deficit ceilings by France and Germany, soon after the launch of the single currency, the "worst mistake in the EU in the past ten years".

Monti also said joint euro bonds would not be at the heart of his talks with Merkel on Wednesday and that the crisis did not originate in the European Union but came from the United States.

(Reporting by Annika Breidthardt; editing by Tim Pearce)