Berlin

Merkel says Italy taking right measures to deal with crisis

Monti's moves should bring down 'very high' borrowing costs

Merkel says Italy taking right measures to deal with crisis

(ANSA) - Berlin, August 29 - Italy's fiscal and economic reforms are sure to yield benefits for the country, German Chancellor Angela Merkel said Wednesday following a meeting with Italian Prime Minister Mario Monti. And that, she added, should lead to further reductions in Italy's "very high" borrowing costs. "The spread between the (German) Bund and (Italy's) BTP is very high, but the Italian government bond auction has given hope: the Italian government headed by Mario Monti is making a significant contribution, which means that the spread will fall," said Merkel at a press conference in Berlin with Monti. Their meeting came at the same time the Italian Treasury sold six-month bonds at their lowest rates since March. But, added Merkel, Italy must continue its efforts to improve the country's economic competitiveness. Monti agreed progress is being made but said that's no excuse to stop now. "The efforts of improving economic policy must be persistent, you cannot stop with a semblance of a good result, but we must go forward with determination," said Monti. The same can be said at pan-European level, where more work is needed, he added. Progress has been against the sovereign debt crisis, "but you cannot stop there." Merkel also called for greater economic integration among European economies and decision-makers. "We are convinced that the path we have chosen is the right one," she said. "We are also convinced that we must improve the ability to cooperate within the euro zone over the next months," working with key agencies including the European Central Bank and the European Union. Later, Monti said he appreciated the support his reforms have received from Italy's main political parties. "I am pleased and grateful for the sense of responsibility," parties have taken in supporting his work, said Monti. Italy's three main political parties "have been able to demonstrate the ability to ensure support for the government action in a difficult situation."

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