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Italian economy stable, insists PM

Silvio Berlusconi has lashed out at his German and French counterparts who demanded tough new measures to spur economic growth in Italy, chiding them for trying to "give lessons" to Rome and insisting that his nation's economy is stable.

The Italian PM's pointedly critical statement came as he called his cabinet for an emergency meeting to discuss growth measures that the European Union has demanded so Italy does not get further dragged into Europe's debt crisis.

The 17-nation eurozone has already been forced to bailout three of its weakest members - Greece, Ireland and Portugal - but could not handle a possible rescue of Italy, the eurozone's third-largest economy.

The cabinet meeting ended after more than two hours without any major announcements.

The EU wants Italy to reform its labour markets and its inefficient judicial system, considered a main impediment to foreign investment. But Italy's bickering political parties have suffered near-paralysis when it comes to making substantive structural reforms.

Over the weekend, French President Nicolas Sarkozy and German Chancellor Angela Merkel issued stern warnings to Mr Berlusconi that he must do more.

Mr Berlusconi, however, bristled at the criticism, saying Italy was already taking measures to cut its public debt and balance its budget by 2013.

"No one in the EU can nominate themselves commissioner and speak in the name of elected governments," he said. "No one can give lessons to EU partners."

He criticised the French and German banking systems as needing reform and insisted Italy's economy was so stable that "no one need fear Europe's third-largest economy".

That said, he urged Italy's political factions to work together for the benefit of the country and Europe. Italy has passed £47 billion in austerity measures aimed at balancing the budget by 2013, but implementation has been slow and the government has faltered on promised growth measures.


From Belfast Telegraph