Monti asks EU leaders to reflect on 'Italian case'

Rome stalemate talking point at Brussels summit

Monti asks EU leaders to reflect on 'Italian case'

By Denis Greenan. Brussels, March 14 - Outgoing Premier Mario Monti said that he would invite European leaders to reflect on Italy and its post-electoral impasse during summit meetings in Brussels Thursday and Friday. "I will ask them to reflect both on the positives and negatives because the Italian case itself calls for reflection in general," Monti said during his last appearance at an EU summit as Italian premier. Following the country's February 24-25 general election Monti warned that there is a danger of populism in Italy that could derail the EU integration course. Pier Luigi Bersani's centre-left alliance came first in the elections, but failed to win a working majority in the Senate because of votes pulled by three-time premier Silvio Berlusconi's centre right and the anti-establishment 5-Star Movement (M5S) of comedian Beppe Grillo. Both Berlusconi and Grillo were accused of using populist rhetoric in the election campaign. Grillo, whose anti-establishment M5S rocked the political establishment with a stunning show in the elections, has proposed holding a referendum on whether Italy should stay in the eurozone. The political stalemate and anti-euro sentiment has revived fears that Italy might need a Greece-style bailout and could rekindle the eurozone crisis that was at its height when Monti replaced Berlusconi in November 2011 with the spread between Italian and German bond yields at unsustainable levels. But ex-Eurogroup head Jean-Claude Juncker said at the summit Thursday that he did not "think that Italy will need a bailout plan any time soon". "Greece was a unique case," said Juncker, who is premier of Luxembourg and recently stood down as head of the Eurogroup - the eurozone's finance ministers - in favour of Dutch Finance Minister Jeroen Dijsselbloem. Bersani, meanwhile, blasted Grillo's claim Wednesday in an interview with German daily Handeslblatt, that Italy was "already out of the euro". Such statements, the PD leader said, could produce "disasters of cosmic proportions". Earlier this month Istat, Italy's national statistics agency, said the recession is biting so hard that the nation's real gross domestic product (GDP) dropped below its 2001 level last year. It added that the nation's debt-to-GDP ratio rose to 127% in 2012 and the tax burden rose to a record 44%. The country's massive national debt of around two trillion euros is the main reason it was exposed to the eurozone debt crisis. Italy's already high tax burden increased with hikes introduced by Monti's emergency government. These tax increase were part of efforts to restore order to Italy's public finances with the aim of balancing the budget in structural terms this year. But Monti's austerity measures also had the effect of deepening the recession Italy slipped into in the second half of 2011. The austerity, which pitched ever more Italians into economic hardship, was seen as one of the reasons Monti performed badly in the general election, coming in a distant fourth in both houses. It also boosted Grillo and Berlusconi's votes, pundits said.

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