Barroso Says Letta Win in Italy Senate Helps Market ConfidenceJonathan Stearns
The European Union hailed Italian Prime Minister Enrico Letta’s victory in a confidence vote, saying it guards against a flare-up of the euro-area debt crisis.
Jose Barroso, president of the European Commission, the 28-nation EU’s executive arm, said the Italian Senate risked provoking a rise in Italy’s borrowing costs if the chamber had opposed Letta’s government.
“It is indeed crucial to avoid an artificial political crisis which can undermine investor confidence in Italy’s economic recovery efforts,” Barroso said in an e-mailed statement today in Brussels. “This is of decisive importance, not only for Italy, but also for the euro zone and the EU as a whole.”
Letta was supported by 235 senators while 70 opposed him during a vote today in Rome. Hours before, former Premier Silvio Berlusconi announced that he would support the government, reversing an earlier pledge to oppose Letta in the vote.
The 17-nation euro area is trying to capitalize on its emergence from recession in the second quarter, seeking to prolong a period of market calm after three years of debt-crisis battles and 496 billion euros ($674 billion) in emergency aid pledges for Greece, Ireland, Portugal, Spain and Cyprus. Italy has so far avoided a bailout, pushing ahead with attempts to contain the budget deficit this year.
Italy’s government bonds advanced after Letta won the confidence vote, avoiding the risk of sending the country to another election.