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Monday, August 6, 2012

Italian Prime Minister predicts possible “psychological disintegration” of EU

Mario Monti, Italian Prime Minister

Italian Prime Minister Mario Monti predicted that the financial crisis in Euro Zone can cause the “psychological disintegration” of EU, according to BBC and PM’s interview for German Spiegel. During his talks with German Chancellor Angela Merkel Mario Monti stated that he is worried about the increase of dislike of Germany among the average Italians. According to his words it is caused by the misunderstanding among some Germans who mistakenly think that Italy has already received the financial help from Germany and the EU countries.

Italian political forces declared before that Italy needs not the financial but rather psychological and moral help more at the current stage. Mario Monti stressed again that Italy is not in need of German financial help and any credits.

The Head of Italian Central Bank Ignazio Visco also declined the possibility of appeal of Italy for the European financial assistance. Italian financial sector needs the confidence that the crisis is overcome; the fiscal discipline and increasing of the economical growth are also required, and Italy will probably need no help from outside. Mario Monti was talking about the same possibilities.

At the same time Italian PM Mario Monti called the European leaders for the fast decisions under the current circumstances. The German politicians answered that it is impossible to take any serious decisions without the participation of the parliament.

Mario Monti stressed for the more freedom regarding the question of the independence of European governments while taking the decisions in attempt to resolve the European financial crisis. From his point of view, if the governments will not have enough freedom and if they will be dependent on the parliaments decisions so much and have no specific frameworks for working, it will not help to resolve the European crisis but rather provoke the disintegration of EU.

It’s worth mentioning that Italy is among those European countries who suffered most cause of the European financial crisis. At the end of July this year the stock trading of Italian banks was even suspended due to the great decrease of the quotes. The rates of many Italian banks were also lowered at the beginning of July. Despite the relatively good situation with Italian small and medium business Italy still has a big foreign debt. Economists estimated that this debt is more than 118% of GDP and reached already $ 2,2 trillion. The Italian government adopted this year the additional program for reduction of the budget costs which will allow to not to increase the taxes for the citizens for the next year.

Italian Senate (the upper house of parliament) also ratified the European Stabilization Mechanism (ESM) and new budgetary pact of EU.

The International Monetary Fund (IMF) stressed earlier that Italian economic is still very sensitive and not stable and depend a lot on the financial stability of the entire European Union. The deeper integration within the Euro Zone can play the decisive role for the guaranteeing of the stability in Italy, according to the IMF officials.