Spread would be 1,200 under Berlusconi, says Monti

Comments anger ex-premier's PDL party

Spread would be 1,200 under Berlusconi, says Monti

(ANSA) - Rome, August 7 - Italian Premier Mario Monti has said he believes the spread between 10-year Italian bonds and the German benchmark would be around 1,200, almost three times the current level, if Silvio Berlusconi's government were still in power. "I think that if the previous government were still in power, Italy's spreads would now be at 1200 or something," Monti told The Wall Street Journal in an interview given last month but published on the newspaper's website on Tuesday. The spread was close to 447 points at 12:47 local time Tuesday. Former European commissioner Monti stepped in to head an emergency government of non-political technocrats after growing market pressure forced Berlusconi to quit as premier in November. The comments drew an angry reaction from Berlusconi's People of Freedom (PdL) party, the biggest group in parliament which means Monti's government needs its support to get its measures approved. "We understand that he might not like the fact the the spread is going up and down during his government and this may have upset him, but that does not justify this provocation that is as useless as it is stupid. We return it to sender," said Fabrizio Cicchitto, the PdL's House whip. The premier appeared, however, to be trying to make a point about investor perceptions that Germany would move to protect France from getting sucked into the centre of the eurozone debt crisis, but would not do the same for Italy under Berlusconi. Indeed, before making the comment on what the spread would be under Berlusconi, he said: "Spreads are still high because our debt is objectively very high, and markets have started realizing in a dramatic way that eurozone governance is weak. France has done much less reform than we have and yet its spreads are lower. I think the reason is that people believe Germany will never let France go".

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