Monti seeks more EU support ahead of Merkel talks

January 11, 2012 - 4:15 AM
Italy Financial Crisis

Italian Premier Mario Monti gestures as he speaks during the Italian State RAI TV program "Che Tempo che Fa", in Milan, Italy, Sunday, Jan. 8, 2012. No European nation is strong enough to ride out the continent's debt crisis alone, Italy's new premier insisted Saturday, urging fellow EU members to develop a common growth policy. Monti will meet with German Chancellor Angela Merkel in Berlin on Wednesday and at a major European summit in Brussels at the end of the month. (AP Photo/Luca Bruno)

BERLIN (AP) — Italy's Premier Mario Monti has warned that his country needs to see more concrete support from the European Union and Germany in return for the painful austerity measures it has adopted.

Monti, who was headed to Berlin Wednesday for talks with Chancellor Angela Merkel in his first official visit to the German capital, was quoted in an interview with German daily Welt as saying that his country's economic reforms do not receive the recognition they deserve.

"It is a problem that despite our sacrifices we do not experience any kind of concession by the EU, for example in the form of a cut in interest rates," Monti said in an interview that was printed in German.

He warned Italians could turn hostile toward Europe and Germany if they do not see that the austerity measures they have accepted lead to any progress in the country's financial situation. Although Monti's government has adopted debt-cutting reforms, Italy's borrowing rates remain dangerously high.

"If the Italians do not see concrete rewards for their willingness to save and reform, there will be protests in Italy against Europe and also against Germany which is seen as ringleader of EU intolerance and against the European Central Bank," Monti told the paper.

The meeting comes after Merkel met in Berlin on Monday with French President Nicolas Sarkozy and on Tuesday evening with International Monetary Fund chief Christine Lagarde.

Merkel and Sarkozy also plan to travel to Italy on Jan. 20 before a European summit at the end of the month.

Italy is a key focus because of its size, huge debt load and need to borrow heavily in the first quarter. The yield on its 10-year bonds is hovering around the 7 percent level that is widely considered to be a danger mark.

Some economists say the European Central Bank should help Italy more by buying its government bonds on the open market in larger quantities. That would lower Italy's borrowing rates and ease pressure on its finances. But the ECB, along with Germany, resist such as move.