Monti Shifts Euro Crisis Fight From Markets to Public Sentiment
Italian Prime Minister Mario Monti said public skepticism about deeper European integration is undermining the progress leaders have made fighting the sovereign debt crisis.
The push to strengthen political and fiscal ties within the 27-nation European Union is threatened by insulting stereotypes and nationalist rhetoric, Monti has said in statements over the last four days. On Sept. 6, the premier proposed a code of conduct to prevent leaders from stoking divisiveness, and yesterday he called for a euro summit in Rome to address tensions between Europe’s north and south.
“One can’t help note a growing and dangerous sentiment of antagonism in member states,” Monti said yesterday in a statement to reporters in Cernobbio, Italy. “It’s paradoxical and sad.”
Monti is focusing on public sentiment after action by European leaders helped ease pressure in bond markets. Yields on Italian and Spanish 10-year debt plummeted in the week ended Sept. 7 to the lowest since April as European Central Bank President Mario Draghi announced his plan to offer aid to governments in financial distress.
“Just when we hoped to complete the integration both at a psychological level and in the public opinion -- so eventually at the political level -- we are rather witnessing the opposite trend,” said Monti as he stood next to European Union President Herman Van Rompuy. Monti cited, “a number of conflicts aiming at disintegration in almost all member states.”
Van Rompuy endorsed the proposal for a special summit in Rome.
The three-year crisis has taken its toll on voters from Athens to Paris and produced a surge in popularity for politicians who oppose European integration. In Italy, Monti’s parliamentary coalition has lost ground in opinion polls to euro-skeptic comedian Beppe Grillo, even as the prime minister’s policies helped lower the country’s borrowing costs.
Monti imposed an austerity budget in Italy, and while abroad he pushed his counterparts, including German Chancellor Angela Merkel, to back measures to relieve bond-market pressure. Monti’s tax increases and spending cuts have helped curb Italy’s budget deficit as the economy sank deeper into recession.
Italian bonds advanced last week, reducing the extra yield that investors demand for holding the nation’s 10-year securities instead of similar-maturity German bunds to 354 basis points, the least in five months. On July 24 that spread had topped 530 basis points, the highest since Monti took power in November.
Monti compared the euro to the crowning ornament on a gothic cathedral in a speech on Sept. 6, and said derisive commentary, like insults traded in the German and Greek press, threatens to destroy it. A former EU commissioner and university president, Monti challenged Italian politicians to monitor their rhetoric and warned lawmakers from northern Europe not to slight their southern counterparts.
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