Italy will overcome the economic crisis on its own without seeking outside aid, Prime Minister Mario Monti said.
“We will make it on our own and we are making it, and not by ceding our sovereignty or under the heel of a troika,” he said, referring to the collective name given to the European Union, International Monetary Fund and European Central Bank.
Those institutions are overseeing national bailout programs as the region struggles to emerge from a debt crisis that’s engulfed Spain and could force Greece out of the euro. In Italy, social tension is rising as austerity measures deepen its fourth recession since 2001 and unemployment swells to a 12-year high.
Police clashed with protesters as Monti spoke at a conference in Bologna, hours after tens of thousands of Italians demonstrated in Rome against his economic policies.
Italy’s 10-year bond yield reached 6.342 percent this week, the highest in almost five months, after Spain became the fourth euro-region nation to request outside aid, fueling concern Italy may follow. The yield ended the week at 5.926 percent, 449 basis points more than comparable German debt.
Monti, who announced a package of measures yesterday aimed at boosting economic growth, said it would take time for Italians to see the fruits of his strategy.
“If for 10 to 20 years these problems were ignored, it’s not realistic to think that in seven or eight months everything can be resolved,” he said.
The outcome of tomorrow’s Greek elections and the ability of EU leaders to deliver a plan for economic growth at a summit on June 28-29 may affect the depth of the crisis and Italy’s ability to overcome it, Monti said. The premier said he “hopes and believes” that Greeks will seek to remain within the euro.
“If in the next two crucial weeks we don’t manage to get something concrete and a perspective for a policy geared toward growth, I think that will change the psychology” about overcoming the crisis, Monti said.
Monti was appointed in November after the resignation of Silvio Berlusconi. When his unelected government took charge, Italy’s 10-year bond yield was more than 7 percent, the level that prompted Greece, Ireland and Portugal to seek bailouts.
At a separate appearance earlier today in Milan, Monti said his government had helped move Italy back “from the precipice of the crater” since taking power. Now that “crater is getting bigger and we are once again in a crisis,” he said.