Monti Says Europe Will Take Action in Case of Deflation Danger

April 29 (Bloomberg) -- Former Italian Prime Minister Mario Monti, the economics professor who imposed austerity in 2011, said European policy makers will be ready to act if deflationary risks materialize in the region.

* German inflation accelerated less than economists forecast

in April, increasing pressure on the European Central Bank

to add stimulus in the euro area; ECB President Mario Draghi

has signaled he’ll use unprecedented measures, from negative

interest rates to quantitative easing, if needed to avert

the risk of deflation in the 18-nation currency bloc * “I’m not too worried,” Monti said in an interview with

Bloomberg Television’s Erik Schatzker at the Milken

Institute Global Conference in Beverly Hills, California;

“Should there be really a deflationary danger in Europe, I

think the instruments will be there for the ECB, for

example, to react and also for the political authorities of

Europe to become for a while a bit less tight on fiscal

policies” * Monti also said he sees a stronger European willingness to

take actions against Russia over its role in eastern

Ukraine’s unrest, though countries’ resolve may vary

depending on their dependence on Russian natural gas imports * In the short term “it’s a matter of how much to scale up

the sanctions, and therefore how far is to be measured in

terms of economic sacrifices for Europe,” he said; “But I

think this Ukraine crisis has a much broader and deeper

message, that is Europe is no longer in the comfortable

state of mind of believing it is in a secure place”

For Related News and Information: Draghi Said to Tell German Lawmakers That QE Is Not Imminent NSN N4R6IE6S972I <GO> Draghi Awaits Key Inflation Data as Radical Action Eyed: Economy NSN N4QV906S972A <GO>

To contact the reporters on this story: Sandrine Rastello in Washington at +1-202-654-4318 or srastello@bloomberg.net; Lorenzo Totaro in Rome at +39-06-45206326 or ltotaro@bloomberg.net To contact the editors responsible for this story: Chris Wellisz at +1-202-624-1862 or cwellisz@bloomberg.net Mark Rohner, Gail DeGeorge

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