Chancellor happy with Italian path in economy

BERLIN - Agence France-Presse

Germany’s Chancellor Merkel says after a meeting with Italian PM Monti that the Italian measures are promising. AP photo

German Chancellor Angela Merkel hailed Italy’s reform measures yesterday and said they would soon return the country to better economic shape, as Italy’s leader said markets were now recognizing the efforts.

“The wide-ranging consolidation and reform agenda of the Italian government are impressive ... and I am personally convinced that these reform efforts will bear fruit,” Merkel said after talks with Italian Prime Minister Mario Monti.

“I think we need to continue along this path together,” added Merkel.

Monti is battling to drive down the debt of the eurozone’s third largest economy with a series of austerity packages and tax hikes, as well as spur future growth with a raft of reforms.

“Markets are in the process of recognizing the successes,” Monti said, noting that earlier yesterday Italy had raised 9 billion euros ($11.3 billion) in six-month debt at sharply lower rates.

Merkel also described the successful bond auction as “hopeful.” Asked whether they had discussed the possibility of Italy applying for a sovereign bailout, Merkel said that “nothing concrete” had been put on the table.