Italy must continue Monti's reforms, warn ECB, Germany

BERLIN - Agence France-Presse

Italian Prime Minister Mario Monti leaves after a media conference at Chigi Palace in Rome in this December 6, 2012 file photo. Monti announced on December 8, 2012 that he intended to resign once next year's budget is approved in parliament after Silvio Berlusconi's party withdrew its support for his technocrat government this week. Only hours before the announcement, Berlusconi said he would run to become premier for a fifth time on a platform that attacks Monti's stewardship of the economy. RE

Germany's foreign minister and a top European Central Bank member warned on Monday that Italy must press ahead with reforms introduced by Prime Minister Mario Monti after he announced his resignation.
 
In comments to newsweekly Spiegel's online version, Foreign Minister Guido Westerwelle cautioned:
"Italy must not stand still after two-thirds of its reform process." "That would bring new turmoil not only to Italy, but also to Europe," added the minister.

During a weekend of political drama in Italy, Monti announced he would soon step down and former leader Silvio Berlusconi launched a comeback bid, prompting financial analysts to predict stormy times ahead for Italian markets.
 
The Italian stock market dropped more than three percent in early Monday trading and borrowing costs spiked amid jitters over the political situation.
 
ECB Executive Board member Joerg Asmussen told Germany's Bild daily that Monti's government had "achieved a great deal in a short time: winning back investor confidence and pushing forward budgetary consolidation." "Whoever governs Italy, a founding country of the EU, after the election must continue this course with the same level of determination," added Asmussen.
 
Italy is now due to hold elections as early as February -- well before the government's mandate runs out at the end of April.
 
The head of the EU's bailout fund, Klaus Regling, also expressed his concern in a German newspaper interview published on Monday.
 
"In the past year, Italy has carried out important reforms. Until now the markets have rewarded that, but they reacted with worry at the events that took place at the end of last week," he told the Sueddeutsche Zeitung.