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Italy doesn’t need German cash, Monti tells germans
Italy needs moral support from Germany but not its cash, Prime Minister Mario Monti said in an interview published on yesterday as German conservatives renewed calls for Greece to leave the euro zone. The Italian leader also told weekly magazine Der Spiegel that he was concerned about growing anti-euro, anti-German and anti-European Union sentiment in the parliament in Rome.
The German government has resisted calls from Italy and struggling countries to introduce common euro zone bonds or take other action to help alleviate the bloc’s sovereign debt crisis, saying it would remove pressure to enact painful reforms. Monti pointed out that, while five eurozone countries have received or requested international bailouts, Italy has not yet received “a single euro” of help.
German loan guarantees and contributions to the eurozone’s EFSF and ESM rescue funds total around 400 billion euros. Monti added that Germany benefited from being in the eurozone. “It is the biggest beneficiary of the common market,” he said, referring to the country’s export-oriented economy.
The high borrowing costs Italy is paying are indirectly helping Germany, he added: “Germany is profiting from the low interest rates it is paying for its government bonds…the high interest rates, that Italy is now having to pay, is subsidizing the low interest rates that Germany is paying.”
Soeder, a leader of the Christian Social Union (CSU) that is the Bavarian sister party to Merkel’s Christian Democrats (CDU), said in an interview in Bild am Sonntag newspaper on Sunday that Greece should quit the euro zone. The CSU has often been more critical of EU bailouts than Merkel’s party, and the German public has doubts about further guarantees for struggling eurozone nations.
“According to my forecast, Greece should leave the eurozone by the end of the year,” he said. “Germans can no longer be the paymaster for Greece. Every new bit of aid, every relaxation of the guidelines would be the wrong way to go.” Soeder added giving Greece further financial help “is like trying to water a desert.” He also said: “At some point, everyone's got to move out of mum's house and for the Greeks the time is ripe for that now.”
Separately, German Foreign Minister Guido Westerwelle said it was his party, the small Free Democrats (FDP), that had fought hard to prevent the introduction of common eurozone bonds. The FDP is battling to stay above the 5 per cent threshold needed to win seats in parliament ahead of next year’s election.
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