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Letta says Europe has fiscal-discipline 'ayatollahs'

Warns EU will die if austerity taken too far

22 November, 10:40
Letta says Europe has fiscal-discipline 'ayatollahs' (ANSA) - Rome, November 22 - Italian Premier Enrico Letta said Friday that the European Union had to resist never-ending demands for fiscal consolidation from pro-austerity "ayatollahs". "On the European front, for some ayatollahs of rigour, this is never enough," Letta said. "But Europe will end up dying of too much rigour, our companies will end up dying". Letta has been pushing for the union to focus more on promoting growth and job creation, after EU-mandated austerity in many countries hit by the eurozone debt crisis caused a great deal of economic pain.

In Italy, for example, unemployment has reached record levels of over 12%, with over four in 10 under-25s jobless, after moves to put the country's financial house in order deepened its longest recession in over two decades. Letta added, however, that many people in Italy were at the other extreme, as they wanted to fix the recession by running budget deficits and adding to the country's huge public debt, the main reason the nation was exposed to the eurozone crisis in the first place.

Italy's national debt is over two trillion euros, or around 130% of gross domestic product.

"On the home front, too many people think you can have deficits and debt," Letta said. "We are in the middle (of the two positions)."