Italy Monti Cites ‘Inappropriate’ Comments Behind Yield Rise

Author: Market News International | Category: News

AIX-EN-PROVENCE (MNI) – Italian Prime Minister Mario Monti said
Sunday that the rebound in Italian sovereign rate spreads late last week
stemmed in part from “inappropriate” comments from northern Europe about
EU summit decisions that were taken to help peripheral states.

Speaking to reporters following a speech at an economic conference
here, Monti said the “increase in spreads was tied to several factors,
including declarations which I considered personally inappropriate.”

Finnish Finance Minister Jutta Urpilainen said last week that
Finland would consider leaving the Eurozone rather than paying the debts
of other countries. “Finland will not hang itself to the euro at any
cost, and we are prepared for all scenarios,” Urpilainen said in a
newspaper interview.

Monti did not refer to Finland by name. Both Finland and the
Netherlands also said last week that they would seek to block Europe’s
rescue funds from buying peripheral country bonds in the secondary
market.

The wide level of the rate spreads in Italy and other countries “is
a concern for the financial stability of the Eurozone,” Monti said. “I
believe it is also a concern for the efficient transmission of monetary
policy throughout the euro area,” he said.

Monti said that decisions reached at the EU summit “must now be
translated into operational terms rapidly” by the Eurogroup.

Beyond short-term measures involving bond buying by Europe’s rescue
funds, Monti said that the reduction of long-term rates in Italy
depended on the Italian economy achieving visibly stronger economic
growth, on demonstrating further progress in fiscal discipline, and on
overcoming financial market fears that there could eventually be an
“implosion” of the euro.

–Paris newsroom, +33142715540; jduffy@marketnews.com

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