Italy PM urges European unity to tackle debt

Monti says European institutions must build up sufficient means to dispel doubts among single currency's solidity.

    After Friday's meeting, Sarkozy, right, said France and Italy 'have exactly the same view on Europe's future' [Reuters]

    The Italian prime minister has appealed to European leaders to form a unified position to tackle the eurozone debt crisis, after holding talks with French President Nicolas Sarkozy in Paris.

    Mario Monti said after Friday's meeting that European institutions must build up sufficient means to dispel any doubts among international investors over the solidity of the single currency.

    "We need a European standpoint which we all work towards," he said.

    "I think that the main danger is the birth and development of a basic failure of understanding between populations and member states and the return of prejudices between the north and south of Europe, old and new member states, with the potential for very, very great divisions."

    Monti also repeated a call for the EU not to neglect policies to stimulate economic growth, even as it kept up a drive to control public finances.

    He repeated that Italy was on course for a balanced budget by 2013.

    'The same view'

    Speaking alongside Monti, Sarkozy said France and Italy "have exactly the same view on Europe's future and on how to resolve the confidence crisis at the heart of the eurozone”.

    France, which has struggled to get a Europe-wide backing on the issue of financial transaction tax or "Tobin tax", is ready to push ahead with the measure alone even if others don’t follow suit.

    Sarkozy also said that he and Angela Merkel, the German chancellor, will travel to Italy on January 20 to meet Monti, as EU leaders push ahead with plans for closer fiscal integration to stem the debt crisis.

    "I will go to Italy on January 20 on the invitation of Mr Monti, accompanied by Chancellor Merkel," Sarkozy said.

    Sarkozy also called on all European institutions to "do their part" in facing up to the eurozone debt crisis, just as European governments had done.

    Monti has stuck to the goal imposed by Europe of a balanced budget and has already passed a $39bn package of austerity measures.

    But Italy's main problem remains weak growth and huge public debt level of 120 per cent of gross domestic product.

    Italy, the eurozone's third largest economy, still poses the biggest threat to the bloc and a debt emergency would overwhelm the bloc's existing defences and potentially destroy the single currency.

    Monti is set to meet the Merkel in Berlin and David Cameron, the British prime minister, in London before a summit of EU leaders in Brussels at the end of the month.

    His appointment as prime minister in November was greeted enthusiastically by European leaders after his predecessor, Silvio Berlusconi, relinquished power under intense public pressure.

    SOURCE: Agencies


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