European Central Bank President Mario Draghi stressed the importance of keeping the public finances in order when asked about the possibility of a new Italian government reversing a 2011 pension reform. "Speaking in general terms, the public budget is of maximum importance in high-debt countries," Draghi said, adding that "we did not discuss this today". The centre right, the coalition that came first in Italy's general election, and the 5-Star Movement, the individual group that got the most votes, have both said they will scrap the 2011 Fornero reform, which features a mechanism to raise the retirement age as life expectancy increases to keep the system sustainable.
Draghi said that the money markets do not appear spooked by Italy's general-election result but he also warned about the impact of prolonged instability. No single party or coalition won enough votes for a majority in parliament in Sunday's election.
He said that what happened after the vote "does not suggest that the markets have reacted in a way that threatens confidence" adding this was "more or less" the same as in other votes elsewhere. Nevertheless, he said, "protracted instability over time could threaten confidence". Draghi answered a question on the strong showing by two Euroskeptic parties, the M5S and the rightwing League, in Italy's general election, by saying that "the euro is irreversible". "I really don't want to comment" on the Italian elections, he said. "I can only say that the euro is irreversible and the reinforcement of economic and monetary union remains a priority", Draghi said. He said that the ECB "urges the adoption of specific and decisive measures to complete the Banking Union and that of the capital markets".
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