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UPDATE 2-Euro crisis response disappointing: Italy minister
June 9, 2012 / 12:07 PM / 6 years ago

UPDATE 2-Euro crisis response disappointing: Italy minister

* Italy emergency not over-Bank of Italy

* Government credibility at stake on reforms-Passera

* Italian banks resilient to Spain crisis-UniCredit DG

By Antonella Ciancio and Jennifer Clark

SANTA MARGHERITA LIGURE/VENICE, Italy, June 9 (Reuters) - I taly must push on with reforms to resolve its economic crisis, the industry minister said on Saturday, expressing disappointment at the euro zone’s efforts to resolve the wider sovereign debt troubles plaguing the bloc.

Speaking at two conferences in northern Italy, Industry Minister Corrado Passera and Bank of Italy governor Ignazio Visco said the crisis in Italy was not over.

“The situation is not like it was at the end of last year, when there was an emergency, but remains very critical,” Passera told a conference of young entrepreneurs on the Italian riviera.

“Europe was more disappointing than we expected, it was less capable of tackling a relatively minor problem such as Greece,” the former banker said.

When Prime Minister Mario Monti took power from Silvio Berlusconi at the end of last year, the Mediterranean country was on the brink of a Greek-style default, and he was given full support to pass a severe austerity package and sweeping reforms to spur growth.

Italy - the world’s fourth largest sovereign debtor - is however coming under growing pressure as the euro crisis sucks in Spain, which looks set to become the fourth country in the bloc to seek assistance.

A bailout for Spain’s teetering banks, once requested by Madrid, could amount to as much as 100 billion euros, two senior EU sources told Reuters on Saturday.

Recent public disputes between Italian ministers have dented Monti’s authority domestically despite him retaining strong international credibility.

Echoing earlier remarks by Italian deputy finance minister Vittorio Grilli, Passera played down on Saturday reports about bickering within the government over funding reforms.

“We put our credibility at stake on reforms, and I guarantee that we will carry them out,” Passera said.

Visco urged Monti’s government to continue with its economic agenda even if it didn’t show immediate results.

“For Italy, the emergency is not over,” the central banker said in a keynote speech to the Council for the United States and Italy.

“Structural reforms, if seen within a consistent and comprehensive strategic framework, can provide the basis for a surge in confidence in our potential for sustained economic growth.”


Moody’s Investors service said on Friday the Spanish banking sector crisis is not threatening other euro zone economies except for Italy, which shares Madrid’s reliance on European Central Bank funding through its banks.

A top executive of Italian bank UniCredit dismissed these concerns.

“Italian banks are strong,” UniCredit’s General Manager Roberto Nicastro told the conference of industry lobby Confindustria.

“Spain can be in a delicate situation, but substantially we do not have to be scared about Spanish banks,” the banker said.

Monti is at the start of an intensive week for European diplomacy. He is due to attend the G20 in Mexico on June 18-19, the weekend after the Greek election.

He is also hosting a meeting between Germany, France and Spain in Rome on June 22 to set the stage for a June 28-29 EU summit that is supposed to map out the future of the euro zone.

UniCredit’s Nicastro said Italy would not resist proposals for a political and banking union requiring nations to cede more sovereignty in order to stabilise the euro bloc.

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