Fin24

Monti: Italy will not need bailout

2012-06-13 08:57

Rome - Italian Prime Minister Mario Monti has denied speculation that Europe's third-largest economy could be the next to apply for European Union assistance.

"Italy even in the future will not need aid from the European Financial Stability Fund," Monti told German public broadcaster ARD late on Tuesday.

His comments came after the country's 10-year yields early Tuesday reached 6.16%, their highest point since January, amid concerns over its spiralling cost of borrowing.

Italy may have high levels of public debt, Monti said, but "very low public debt" among companies and households. The high cost of borrowing was simply due to "tensions on the market", he said.

In addition, the deficit was far lower than in many other European countries, was projected to be 2% this year, and would reach a surplus in 2013, he said.

"I can understand that Italy, because of its past, can be seen as a fun-loving, undisciplined country," Monti told the radio station. "But now it is more disciplined than many other European countries, and it is not even particularly fun."

He also said that Italy is contributing to the bailouts to help Greece, Portugal, Ireland and Spain.

While the country's banks are in a stronger position than their Spanish counterparts, its economy is still in recession and predicted to shrink by 1.7% this year by the Organisation for Economic Cooperation and Development.

On Monday, Italian Industry Minister Corrado Passera rejected the notion that his country may need external help, describing Italy as "among countries better placed to deal with the financial turmoil Europe finds itself in".

But Austrian Finance Minister Maria Fekter late on Monday refused to rule out the possibility of assistance to Italy, in comments criticised by Monti.

A test of investor confidence in Italy is expected on Thursday when the treasury is to offer up to €4.5bn of fixed-rate bonds at its regular mid-month auction.

Comments
  • francois.greeff.98 - 2012-06-15 06:29

    The modern version of "Nero fiddled while Rome burned"

  • pages:
  • 1