EU urges Italy to commit to cuts, new bailout fund soon
BRUSSELS - Worried about Italy's financial health, the European Commission urged Rome on Monday to demonstrate its commitment to budget cuts and called on the eurozone to quickly beef up its bailout fund.
The European Union's executive arm confirmed it was sending a monitoring mission to Italy this week to ensure that Prime Minister Silvio Berlusconi's government follows through on promised measures to slash a massive debt.
Brussels has sent a questionnaire to Rome asking the government to clarify what "concrete action plans" will be undertaken and the timeline for implementing the measures, a commission spokesman said.
Eurozone finance ministers meeting in Brussels later Monday expect Italian Finance Minister Giulio Tremonti to provide these clarifications, said the spokesman for EU economic affairs commissioner Olli Rehn.
"We are looking forward to hearing from Mr Tremonti how and when the Italian authorities intend to implement the exhaustive list of commitments" that Berlusconi presented last week to Brussels, spokesman Amadeu Altafaj said.
With markets doubting Rome's commitment to taking tough measures to reduce its 1.9-trillion-euro debt pile, Berlusconi has invited the International Monetary Fund to join the European Commission in scrutinising the country's books.
Altafaj said the commission's team would provide their assessment to eurozone ministers some time this month while the IMF would likely present its own report.
Italy has come under fire from the markets as its borrowing costs soared to record highs on Monday, hitting the sort of levels that forced Greece, Portugal and Ireland to take tens of billions of euros in EU-IMF bailouts.
The market pressure prompted the European Commission to urge eurozone leaders to speed work on boosting the firepower of the 17-nation bloc's 440-billion-euro bailout fund, the European Financial Stability Facility (EFSF).
"The developments in the debt markets show the need to accelerate work on strengthening the EFSF's capacity to act," Altafaj said.
Eurozone leaders want to increase the EFSF's lending capacity to one trillion euros and planned to get it done by the end of November but Altafaj said the situation in the markets, notably in Italy, "changed the game."
The eurozone wants to boost the fund without without increasing the guarantees provided by individual governments.
One scheme would see the EFSF serve as an insurance policy on debt issued by distressed nations in order to convince investors to keep buying such bonds with reasonable interest rates.
The eurozone has struggled, however, to develop a second plan to attract nations outside the eurozone, namely emerging powers like China, to put money into a separate investment vehicle to top up the EFSF.
Europe failed to secure firm commitments on this course from G20 partners at a summit last week
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發表於 2011-11-7 06:52
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