UPDATE 1-EU's Barroso confident Italy will maintain stability

Thu Feb 28, 2013 6:46am EST

* Barroso says in Italy's interests to stay on current path

By Padraic Halpin

DUBLIN Feb 28 (Reuters) - European Commission President Jose Manuel Barroso said on Thursday he was confident that Italy's next government would honour its commitments and would not derail growing confidence in the euro zone.

Investors are nervous over whether the political gridlock that emerged from the Italian elections could hurt euro zone growth, and whether support from the European Central Bank for a nation in trouble can be used if there's no workable government.

Barroso said it was in Rome's interests not to undermine the confidence that has been building up in the country in the past year because the alternative would mean rising borrowing costs that would not be good for anyone in Italy.

"I'm confident that Italy will honour its commitments," Barosso told reporters on the sidelines of a conference in Dublin where he told an audience that he believed bailed out Ireland's economy was turning a corner.

"One thing for me is clear is that Italy needs stability and a programme that reinforces confidence. I'm completely confident that the Italian government, after this normal procedure of democracy, will keep this path because it is certainly in their interests."

The Commission chief appealed to EU leaders at a Reuters Summit earlier this week not to give in to populism after the Italian election raised questions about the tough fiscal policies advocated by the European Union.

In a joint statement on Wednesday with outgoing Prime Minister Mario Monti, whose austerity policies Italians voted to reject, Barroso also urged Italy to press ahead with reforms to improve its economic growth potential.

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