August 30, 2011 / 9:40 AM / 8 years ago

Bank of Italy says austerity plan consistent with ECB

ROME, Aug 30 (Reuters) - Italy’s austerity plan currently going through parliament is in line with recommendations made this month in a letter from the European Central Bank, a senior Bank of Italy official said on Tuesday.

“We consider it is basically consistent with the letter, which wasn’t a letter from the ECB but a letter from the ECB and the Bank of Italy,” Ignazio Visco, deputy director general of the central bank told a senate hearing on Tuesday.

He said the ECB’s intervention to buy Italian bonds, which has contributed to easing the market tensions which had threatened to drive Italy’s borrowing costs to unsustainable levels was not connected to the austerity package.

“This is not a letter like a letter from the International Monetary Fund which says that, ‘on condition that you do such and such you will have this loan’. It’s nothing like that at all,” he said.

“It’s a letter in which nothing at all is promised by the ECB or the European system of central banks, still less in which any measures that might be undertaken might be announced.”

The letter has so far not been made public despite repeated calls from the centre-left opposition. (Reporting by James Mackenzie and Catherine Hornby)

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