Debt Crisis: Italy plays down bailout rumours

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Debt Crisis: Italy plays down bailout rumours

Debt Crisis: Italy plays down bailout rumours
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Italian Prime Minister Mario Monti assured his parliament on Thursday that the country is working through its debt problems and would not need an EU rescue.

Earlier, he firmly denied comments by Austria’s finance minister Maria Fekter that Italy may – like Spain – also need a financial bailout. Monti insisted on German radio ARD that Rome would not require additional support.

On Tuesday, Italy’s cost of borrowing climbed once again to levels not seen since January as fears mount of a possible debt contagion from Spain which finalised a 100 billion euro bailout from the EU over the weekend.

Monti’s reassurance was backed up by German Finance Minister Wolfgang Schaeuble who said there would be “no risks” if Italy sticks to its austerity reform plan.

Meanwhile the Spanish government has ruled out a parliamentary debate to discuss its bailout.
The opposition socialists called for a full understanding of the bailout conditions but officials said that won’t take place until after an EU summit at the end of the month.

Spanish Prime Minister Mariano Rajoy deflected the issue, calling the bailout a credit, in a weekly question and answer session in parliament.

“This is a credit to the banks that they themselves are going to pay back,” Rajoy told MPs.

Spain’s parliament will be in recess throughout July.