P.M. insists Italy ‘will not need a bailout now or in future’
MILAN (AFP) -- There will be no danger of Italy succumbing to the debt crisis if it continues to implement structural reforms and growth measures, German Finance Minister Wolfgang Schaeuble said.
“If Italy continues on the path Monti has set out on it will not be in danger,” Schaeuble said in an interview published by La Stampa newspaper on Wednesday.
“Italy has progressed greatly under Monti's government. That is acknowledged throughout Europe and on the markets,” he said, adding that he hoped Italian parliamentarians and public opinion would continue to support the premier.
Monti’s “road to sustainable growth through structural reforms, greater competitiveness and reduction of the deficit is the right one,” he said.
Monti took over from Silvio Berlusconi at the end of last year as the eurozone crisis took a turn for the worse and managed to regain market confidence with austerity measures and reforms.
Investor concerns, however, have increased steadily in recent weeks, with Spain's request for EU help to rescue its stricken banking system sparking fresh turmoil on the markets.
On Tuesday, Monti, a former EU commissioner, said the country “will not need a bailout even in the future” and called on the markets and financial observers “not to be governed by cliches or prejudices.”
“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,” Monti told German radio ARD.
Skittish investors fearing a knock-on effect from Spain to Italy caused markets to plunge this week and all eyes will be on a bond sale later Wednesday as an indicator of just how much investor confidence may have been affected.
While Italy’s banks are not exposed to the real estate crisis which has rocked Spain and its public deficit is lower, there are fears the recession-hit country's total debt mountain of 1.9 trillion euros may make it the next eurozone domino to fall.
