Brussels, 23/10/2011 (Agence Europe) - Italy must reassure the markets and its EU partners at a time when these latter are working to support it against speculative attack. It must prove that it is credible by making form commitments with regard to the implementation, on time, of the “courageous (budgetary and structural reform) measures” it has agreed. Its partners await pledges at the summit to take place on Wednesday of this week.
Such was the substance of the message addressed by member states to Italy through European Council President Herman Van Rompuy, following the extraordinary summit in Brussels on Sunday 23 October. “We are asking a great effort of the Italian authorities, and I believe they are ready to make it”, said Van Rompuy of the measures agreed by the Italian authorities within the framework of two austerity plans to bring back budgetary balance from 2013 and to reduce a debt equivalent to 120% of GDP (€1,900 billion), reforms in relation to both reduction of public deficits and the labour market, public undertakings, privatisations, justice and tackling fraud.
Italian Prime Minister Silvio Berlusconi, who has been under pressure for several days, attempted to reassure his partners who are fearful that Italy might slacken off in its restructuring efforts, particularly after the critical comments of Emma Marcegaglia, the head of the Italian employers' organisation, on the delay in implementing the austerity plan adopted by the government under pressure from the European Central Bank (ECB). From the moment he arrived, Berlusconi embarked on a series of bilateral meetings, with Herman Van Rompuy and Commission President José Manuel Barroso initially, before meeting German Chancellor Angela Merkel and French President Nicolas Sarkozy. “We made it clear to Silvio Berlusconi that Italy has to do all it can to assume its responsibilities”, said Merkel at a joint press briefing with Sarkozy after the meeting. “A firewall will not be enough to instil confidence. … Italy has considerable public debt. This has to be reduced in a credible way in the coming years”, she added, indicating that Italy should work to relaunch growth and at the same time reduce indebtedness. Sarkozy was every bit as frank: “There is no point in calling for the solidarity of partners if one does not make the necessary efforts”, alluding to the current increasing of capital in the European Financial Stability Facility (EFSF) with a view to protecting Italy and Spain. Berlusconi, very sure of himself, stated after the meeting: “I have never in my life flunked an interview”.
A further tetchy issue on which the Italian prime minister will have to provide guarantees for France is compliance with the tacit pact between the two countries on having a French national on the ECB Executive Board. France put its weight behind Mario Draghi for the presidency of the ECB after Jean-Claude Trichet's term of office came to an end, on condition that it would have a seat on the Board, one currently held by Lorenzo Bini Smaghi. Smaghi, however, refuses to resign as he was not appointed head of the Bank of Italy as he expected (the post was given to Ignazio Visco). On Saturday, Berlusconi called on Smaghi to “resign form a post he holds through the will of the government”. He has no power to force Smaghi out, however. (FG/transl.rt)