We don’t want to become another Greece: Italian PM

reforms to parliament, saying the package would help solve the eurozone debt crisis.
“Without this package we believe Italy will collapse, Italy will become like Greece, a country for which we have a lot of sympathy but which we do not want to become,” Monti, a former EU commissioner, said at a Press conference.
“We did our part yesterday,” said Monti, adding that he was optimistic that the crisis-busting plan of tax increases, budget cuts and pension reforms adopted by the cabinet on Sunday would be approved in parliament.
“For Italy to have a credible, incisive and respected role in a European, international context it has to resolve grave problems . . . that sometimes make it a less than credible partner and even a source of infection,” he said.
Financial markets, meanwhile, rallied and the European Union praised Italy.
Stocks in Milan were up around 2,0 percent and the differential between the rates on Italian 10-year government bonds and benchmark German ones, which had risen to record highs in recent weeks, narrowed to 4,22 percent.
“This package is a very important step to shore up the public finances and support economic growth,” the EU’s Economic Affairs Commissioner Olli Rehn said, adding:
“This set of measures is timely and ambitious.”
Monti, an economics professor who came to power just three weeks ago, said the plan would save 20 billion euros (US$27 billion) but would not prevent the economy from slipping back into recession next year.
Italian newspapers said the measures were “a bitter medicine” but were necessary to save Italy, the eurozone’s third-biggest economy, from defaulting on its massive debt, a prospect that has set off alarm bells around Europe.
Most controversially the plan includes a pension reform that will increase the minimum pension age for women to 62 from 2012 and see both sexes retire at 66 by 2018 – as well as increase the number of years men have to pay dues.
All pensions except those below 960 euros a month will also not be indexed to inflation for 2012 and 2013 – a measure that has ignited trade union fury.
Monti was set to present his plan at 1500 GMT to parliament, where final approval is expected before the start of the Christmas holidays despite criticism from Italy’s powerful trade unions and the centre-left.
“We want a Europe that does not come apart, that is integrated, even if everyone retains their individuality,” Monti said earlier on Monday after meeting Dutch Prime Minister Mark Rutte in Rome.
“We agreed particularly on the need to reinforce the eurozone institutionally but also to create as little divergence as possible between the eurozone and the other 10 member states of the European Union,” he said.
France and Germany have outlined plans for deeper integration in the eurozone which would include more space for intervention in weaker economies. – AFP.