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Italy must thank Germany for austerity push, Monti says

Economy 'would be drifting into space'

02 May, 20:05
Italy must thank Germany for austerity push, Monti says (ANSA) - Rome, May 2 - Italian Premier Mario Monti said Wednesday that while he would urge Germany to adopt its positions on the euro crisis, Italy owed the country a debt of gratitude for its austerity drive. "We must persuade Germany, but we must also thank it," he said. "Without the current (budget) constraints, the Italy of today would be a country drifting off into space, which is still possible". The German government said last week it was trying to find common ground with Italy on a plan to stimulate growth in Europe, which most economists and heads of government now agree is necessary after having first implemented austerity packages.

Last week European Central Bank Governor Mario Draghi, who is Italian, called on Europe to agree on a pact for growth and on individual member states to be more ambitious in introducing structural economic reforms to promote it.

German Chancellor Angela Merkel said she agreed with Draghi's appeal.

The Italian premier's emergency government of non-political technocrats has made fixing the economy its top priority in the wake of the euro crisis which led to ex-premier Silvio Berlusconi's resignation last November.

The Milan bourse dropped 2.6% to 14,213 points on Wednesday as the spread between Italian and German 10-year bonds was 394 at the close of trading. The yield, another important indicator of investor confidence in Italy's ability to pull out of the crisis, was 5.55%.