–Could Raise Debt Costs, Push Italy Into Ungovernable Spiral
–By Saving Ourselves, Would Contribute to Saving Europe
ROME (MNI) – Mario Draghi, who is set to take over as next
president of the European Central Bank, said Wednesday that further
interest rate increases could plunge Italy into a potentially
unstoppable spiral, and negate the budget efforts to date.
But the budget cuts so far, while positive, are not enough, and
Italy must do more to boost growth, in order to contribute to
stabilizing the European economy, Draghi said in a speech prepared for
delivery to a Bank of Italy conference on Italy and the world economy,
1861-2011.
“Continuing interest rates hikes at the same speed of those of the
last three months would render largely useless the budget measures Italy
has taken so far this year, would have a further, possibly negative,
effect on the cost of debt, and push Italy into a possibly ungovernable
downward spiral,” Draghi warned.
“The measures introduced in the past summer propel Italian public
finance along into a road of increased sustainability, but it is not
enough.”
Draghi said Italy must “reinforce our position in Europe, and hence
kickstart growth and drastically reduce public debt.”
And he added that “by saving ourselves, we would contribute in a
decisive measure towards saving Europe.”
** Market News International **
[TOPICS: M$X$$$,MI$$$$,M$$EC$,M$I$$$]
