Italy’s Monti Warns Against EU Divide

(EurActiv) — Addressing the European Parliament in Strasbourg, Italian Prime Minister Mario Monti warned against the dangerous divisions fuelled by eurozone problems and said that even though southern countries were widely blamed for the debt crisis, France and Germany also carried major responsibility for watering down the bloc’s fiscal rules. EurActiv Italy reports.

Monti said it was wrong to try to divide member states into “goodies and baddies”. “The eurozone crisis has given rise to too many resentments and re-created too many stereotypes, it has divided Europe into central countries and peripheral ones,” he stressed.

Frequently interrupted by applause, Monti rejected the popular division of the eurozone into virtuous northern countries and profligate southern ones, such as Greece, which is fighting against default.

The Italian premier talked in Strasbourg just a few hours after the publication of fresh data which showed that Italy is in recession, as the economy contracted in the fourth quarter of 2011 by 0.7%. In 2011, growth fell to 0.4%, compared to 1.4% in 2010, which was way below 1. 7% in France and 3% in Germany. Meanwhile, Bankitalia yesterday indicated that debt is increasing.

Nevertheless, Monti said the worse-than-expected economic reports were not a reason for Italy to employ more austerity measures on top of the three deficit-cutting packages adopted last year. He said it was positive that budget performances were now adjusted for the effects of the business cycle, giving some breathing space for countries hit by recession such as Italy.

He spoke to the European Parliament after having met US President Barack Obama in Washington and shared with the Assembly a thought common to him and Obama: fiscal discipline is fine, but we also want growth.

Monti was welcomed triumphantly in Strasbourg. Guy Verhofstadt, the leader of the liberal group ALDE, said Monti reforms could be a model for troubled Greece.

“Greece should look at what is happening in Italy. The type of structural reforms, overhaul of the public sector and changes to the political system being undertaken by the Monti Government are also necessary in Athens,” said Verhofstadt.

Before the plenary session, Monti met European Parliament President Martin Schulz and reiterated his support for eurobonds, which are currently rejected by Germany, and said Europe should at some stage consider excluding money spent on public investments from calculations of budget deficits.

Referring to general elections, he said Italy is not Greece and Italians will be called to vote at the end of the legislature, in the spring of 2013. He said there was no need to go for early elections.