Sunday

12th Jul 2020

Italy denies need for bail-out

  • The 'Monti effect' is fading: investors are sceptical, while political and public support ebbs away (Photo: European Commission)

Italian Prime Minister Mario Monti has said his country does not need a bail-out, even though its borrowing costs have soared amid contagion from Spain, whose recent bail-out has failed to calm markets.

"Italy even in the future will not need aid from the European Financial Stability Fund," Monti said in an interview with the German Public Radio ARD on Tuesday (12 June).

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

He called on investors and market analysts "not to be governed by cliches or prejudices" and argued that his country has left its "undisciplined" past behind and is doing more to put its house in order than many other European countries.

He spoke as Italy's borrowing costs went above six percent on Tuesday, while Spain's reached almost seven percent.

The figures indicate that markets are unimpressed by the €100 billion bail-out secured last weekend for its ailing banks.

In a separate press conference that day, Monti refuted claims by Austrian finance minister Maria Fekter that Italy is the next in line for outside rescue.

"I find it completely inappropriate that representatives of other governments in the European Union are talking about the situations of other countries," he said.

Fekter - who is well known for her faux-pas - earlier that day said: "Italy has to work its way out of its economic dilemma of very high deficits and debt, but of course it may be that, given the high rates Italy pays to refinance on markets, they too will need support."

She backed down later on, saying she had no information about Rome planning to ask for aid.

Meanwhile, Monti's own political support is weakening.

Late on Tuesday, the technocrat Prime Minister summoned the heads of Italy's biggest political parties to remind them that their backing is crucial for Italy to "overcome the critical nature of the current situation and project an image of cohesion abroad," according to an official statement.

The former EU commissioner was appointed last year to take over the government and initially won EU praise for quickly implementing reforms.

But a deepening recession, high debt and low productivity are putting Italy on the same track as Spain.

Public confidence in Monti is also waning: a poll last week found that his support fell to 34 percent, compared to 71 percent when he took office.

Italy chastises Germany for handling of euro crisis

A German finance ministry official caused a stir Thursday by urging deficit countries to "become ants" rather than profligate "grasshoppers." Italy's Mario Monti urged Berlin to reflect "deeply" on its approach to the crisis.

Michel lays out compromise budget plan for summit

Ahead of expected tense discussions next weekend among EU leaders, European Council president Charles Michel tries to find common ground: the recovery package's size, and grants, would stay - but controls would be tougher.

EU forecasts deeper recession, amid recovery funds row

The economies of France, Italy and Spain will contract more then 10-percent this year, according to the latest forecast by the EU executive, as it urges member state governments to strike a deal on the budget and recovery package.

News in Brief

  1. Citizens' perception of judicial independence drops
  2. Irish finance minister voted in as eurogroup president
  3. Italy's League party opens office near old communist HQ
  4. 'Significant divergences' remain in Brexit talks
  5. Germany identifies 32,000 right-wing extremists
  6. WHO to hold probe of global Covid-19 response
  7. China accuses Australia of 'gross interference' on Hong Kong
  8. EU to let Croatia, Bulgaria take first step to join euro

EU forecasts deeper recession, amid recovery funds row

The economies of France, Italy and Spain will contract more then 10-percent this year, according to the latest forecast by the EU executive, as it urges member state governments to strike a deal on the budget and recovery package.

Stakeholders' Highlights

  1. UNESDANext generation Europe should be green and circular
  2. Nordic Council of MinistersNEW REPORT: Eight in ten people are concerned about climate change
  3. UNESDAHow reducing sugar and calories in soft drinks makes the healthier choice the easy choice
  4. Nordic Council of MinistersGreen energy to power Nordic start after Covid-19
  5. European Sustainable Energy WeekThis year’s EU Sustainable Energy Week (EUSEW) will be held digitally!
  6. Nordic Council of MinistersNordic states are fighting to protect gender equality during corona crisis

Latest News

  1. Michel lays out compromise budget plan for summit
  2. Border pre-screening centres part of new EU migration pact
  3. EU 'failed to protect bees and pollinators', report finds
  4. MEPs give green light to road transport sector reform
  5. If EU wants rule of law in China, it must help 'dissident' lawyers
  6. Five ideas to reshape 'Conference on Future of Europe'
  7. EU boosts pledges to relocate minors from Greece
  8. Hydrogen strategy criticised for relying on fossil fuel gas

Join EUobserver

Support quality EU news

Join us