Italy 'on the right path' to stability
Economic reforms proposed by Italy are the right medicine to pull the country out of its crisis.
BERLIN - Economic reforms proposed by the Italian government are the right medicine to pull the country out of its crisis, a German government spokesman said on Wednesday, amid renewed market turmoil.
"I think that the path that has begun under (Prime Minister) Mario Monti is exactly the right one ... and the right way to ensure that the country is stabilised over the long-term," said a spokesman for the finance ministry.
"The federal government and the minister are totally convinced that if Italy consistently follows the reform path ... it will be in a position to overcome its challenges," added the spokesman, Martin Kotthaus. The German government's deputy spokesman, Georg Streiter, told the same briefing it would be "exaggerated" to say that Berlin is concerned about the situation in Italy, whose borrowing costs have risen sharply in recent days.
"I think the whole European Union has been occupied for the past few years in keeping the euro stable ... so it would be an exaggeration to say that we are now especially worried about Italy." "The whole EU and the federal government are striving to stabilise the euro," Streiter told the regular news briefing.
Monti managed to regain financial market confidence after taking over from Silvio Berlusconi at the end of last year, but investor concerns have increased steadily ahead of Greek general elections and amid a Spanish bank bailout.
Monti told the cabinet earlier Wednesday he was relaxed about Italy's standing on international markets at a "crucial" time for the eurozone, despite rising crisis contagion. The former EU commissioner said that Italy had a lower public deficit and unemployment rate than many other EU countries, and "stable" banks which were not exposed to the real estate crisis threatening Spain.
Monti was due later Wednesday to receive a prize in Berlin, presented by German Finance Minister Wolfgang Schaeuble. For his part, Schaeuble told Wednesday's edition of Italian daily La Stampa that "if Italy continues on the path Monti has set out on, it will not be in danger."