European Union policy makers must adopt more aggressive measures to boost economic growth instead of waiting for austerity measures to run their course, Italian Prime Minister Mario Monti said.
Europe and Italy are in a “particularly intense and crucial” phase that may culminate at a meeting of EU leaders in Brussels on June 28-29, he said in a speech to Parliament in Rome today. Italy’s risk premium over Germany, currently more than 4.5 percentage points, will decline if the summit adopts a “credible package of growth measures” he said.
Only by fostering economic growth that will allow countries to reduce their debt levels will calm be restored to financial markets, Monti said. Measures to mutualize debt such as through euro bonds or infrastructure bonds or by creating a bond redemption fund should all be part of the debate, though none of them could be implemented this year, he said.