Brussels, 05/07/2012 (Agence Europe) - Italy and Germany are at the forefront of eurozone nations wanting deeper political union and the transfer of sovereignty to Brussels to ensure proper stability of the single currency. In Rome on Wednesday 4 July after a meeting with the German chancellor, Angela Merkel, the Italian prime minister, Mario Monti, said the two countries were those most prepared to share sovereignty at European level, which means more effective economic policy tools. As always, the idea must be one's own responsibility on the one hand and solidarity on the other, said Merkel.
The European summit last week gave the president of the European Council, Herman Van Rompuy, until October to look into how economic and monetary union can be strengthened through banking inion, budget union and economic union (see EUROPE 10645). In the eurozone at least, this approach will necessarily give the European Commission and the ECB greater powers and by the end of this year, the ECB will become the single bank regulator for the eurozone.
Monti said that Italy was not planning to make any aid requests from the eurozone bailout funds. The eurozone summit said that the bailout funds can buy up sovereign bonds on the secondary markets, in the event of an emergency, to help countries carrying out the recommended macroeconomic and budget reforms but still finding it difficult to roll over their debt (countries being unfairly picked on by the markets). Merkel and Monti said that the decision had been unanimous - thus brushing aside doubts expressed after the summit by Finland and the Netherlands about the bailout funds buying up public debt (see EUROPE 10646).
Deficit. Monti admitted that Italy's deficit will be 2% of GDP this year, rather than the forecast 1.3%. He said that Italy was trying to achieve stability by cutting spending and would have a deficit of 2% in 2012, half the EU average, returning to a primary surplus in 2013, which is why it is not asking for aid. Merkel congratulated the country on carrying out reforms at record speed despite the recession. Monti's term of office expires in the spring of next year. (MB/transl.fl)