With a stand-off over European Central Bank help for Italy and Spain hardening Italy’s technocrat Prime Minister Mario Monti has called for greater urgency. He warned without it Europe risked breaking up.
Monti is engaged in a battle to force four billion euros of spending cuts in Italy this year, and on Monday called for a confidence vote on the savings.
The financial help must come from Germany, but every decision in Berlin needs parliamentary approval, which takes too long, says Monti.
“Mr Monti has to be careful” said Robert Halver, trader for Hauck & Aufhaeuser. “One cannot just switch off democracy so the parliaments have no say in the matter anymore, in order to change the eurozone into a bureaucratic monster. That is not democratic at all. The problem of the eurozone is not that the parliaments interfere but that many countries like Italy did not do their homework. If you are sloppy you’d better be quiet.”
Spain, which was still paying over seven percent interest on its bonds at the start of this week, is even more hard-pressed, as borrowing at this rate is unsustainable. Along with Italy it is waiting to see the details of the ECB’s bond-buying proposals before deciding whether or not to apply for a bailout.