* Monti had said Merkel not keen on Italy centre-left win
* Uncertainty over vote sends Italian shares lower
By Catherine Hornby
ROME, Feb 21 Italian Prime Minister Mario Monti
rowed back on Thursday from comments suggesting that German
Chancellor Angela Merkel did not want his centre-left rivals to
Monti, leading a centrist coalition in a Feb. 24-25
election, was quoted a day earlier as saying he did not think
Merkel had "any wish to see the PD in government", referring to
the Democratic Party, the main centre-left force which has been
leading in opinion polls.
He was responding to an assertion by his other main rival,
Silvio Berlusconi, that Monti and PD leader Pier Luigi Bersani
had already agreed to join forces "with Merkel's blessing".
In a video interview broadcast on the website of the daily
Corriere della Sera on Thursday, Monti insisted Merkel would
have no involvement in how Italy's next government is formed.
"I wanted to rebut what Berlusconi said yesterday and say
that it was not only untrue but implausible," he said.
Monti denied "that there was any kind of conversation
between me and the PD about an agreement - false - or that Mrs
Merkel has even the slightest involvement".
In an increasingly bitter election campaign, Berlusconi has
sought to paint Monti as a Merkel subordinate, following
"German-centric" austerity policies ordered by Brussels and
Berlin that he says have plunged Italy into recession.
On Thursday, German Finance Minister Wolfgang Schaeuble
offered his support, saying "Things went well with Monti" but
stressing that Berlin did not want to get involved in the
Monti in turn has accused the scandal-plagued Berlusconi of
damaging Italy's international credibility and has highlighted
his own image outside Italy as a guarantor of stability.
Underlining wariness of Berlusconi outside of Italy, the
German president of the European Parliament Martin Schulz, who
the media tycoon once compared to a Nazi concentration camp
guard, on Thursday warned Italians not to vote for him.
"Silvio Berlusconi has already sent Italy into a tailspin
with irresponsible behaviour in government and personal
escapades," Schulz was quoted as saying in German daily Bild.
WORRIES ABOUT REFORM HALT
Schulz is the latest in a line of German politicians to
express fears about a possible Berlusconi comeback largely due
to worries he will halt Rome's reform drive that has helped to
lift investor confidence in the euro zone.
Some top European business executives have also publicly
commented on the vote, with the chief executive of German lender
Allianz, Michael Diekmann, saying on Thursday that Italy needed
a pro-European government capable of taking strong action.
The comments could prove counterproductive however by
backing up Berlusconi's assertions that European leaders and
businesses are trying to meddle in Italian politics.
"I'm the one protecting Merkel from any arbitrary
involvement in the Italian election that Berlusconi is
attributing to her," Monti said.
He also denied that if he were to seek an agreement with the
left he would need the "blessing" of the conservative German
"It's a bit paradoxical when you think of it because Merkel
and Berlusconi are part of the same political family," he said.
Most pollsters believe the centre left is still on course to
win the elections, but a surge in support for Berlusconi after a
media blitz in recent weeks and gains for anti-establishment
comedian Beppe Grillo are increasing uncertainty.
Italian shares fell sharply on Thursday, weighed down by
concerns over the unclear outcome of the vote. Milan's blue chip
index slipped about 3 percent, underperforming other
Italian 10-year bond yields rose 6 basis points to 4.48
percent, still well below a peak of 4.64 percent seen earlier