Italy doesn't need firewalls, Europe does: Monti
NEW YORK |
NEW YORK (Reuters) - Italian Prime Minister Mario Monti said Rome will not need bailout funds to overcome its debt crisis, but he reiterated that Europe should build large financial firewalls to "impress the market and take the perception of risk away."
Fears that Europe's current rescue funds are insufficient to contain a possible escalation of the euro-zone debt crisis have been roiling financial markets. Italy's 1.9 trillion debt load is about four times the size of a permanent bailout fund that EU leaders are set to sign at the beginning of March.
"I believe firewalls are necessary. The higher they are in terms of financial resources, the more likely it is that those financial resources will not have to be used," Monti said in an interview with CNBC on Friday.
"I don't say this because Italy might be in need because I don't believe that Italy, with the tough policies that we're pursuing, will be in need," he added.
Monti, who met President Barack Obama in Washington on Thursday, said he did not have a "clear expectation" on whether a deal to avoid a hard default by Greece will be soon reached.
"Once a deal is in reach, and badly needed, it tends to happen," he said.
Asked whether Italy would abandon the euro if Greece defaulted and ended up leaving the common currency, Monti said his interviewer was "going very fast."
"First of all, it's far from sure that there will be a Greek default. I believe there will not be. Secondly, default or not, I don't see Greece leaving the euro," he said.
In New York to meet with Wall Street investors, Monti tried to convey an upbeat message: "What's important is that this improved governance of the euro zone is almost there and the euro zone crisis is almost overcome, I believe".
Speaking at a news conference at Italy's mission to the United Nations, Monti said that he was warmly greeted by the financial community. At the New York Stock Exchange earlier on Friday he gave a speech to an audience of around 200 about Italy's effort to bring its public deficit under control.
"I heard public and private words about the present situation in Italy that were more positive than I had expected," he said at the conclusion of his 2-day visit to the United States, adding that to see the impact on financial markets would take time.
"The markets talk more by buying and selling than with words," he said.
(Reporting By Tiziana Barghini, Walter Brandimarte; Editing by Gary Crosse, Andrew Hay and Richard Chang)
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