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Italy safe if Monti stays on track: Schaeuble

There will be no danger of Italy succumbing to the debt crisis if it continues to implement structural reforms and growth measures, German finance minister Wolfgang Schaeuble said.

‘If Italy continues on the path [Prime Minister Mario] Monti has set out on it will not be in danger,’ Schaeuble said in an interview in La Stampa newspaper on Wednesday.

‘Italy has progressed greatly under Monti’s government. That is acknowledged throughout Europe and on the markets,’ he said, adding that he hoped Italian parliamentarians and public opinion would continue to support the premier.

Monti’s ‘road to sustainable growth through structural reforms, greater competitiveness and reduction of the deficit is the right one,’ he said.

Monti took over from media magnate Silvio Berlusconi at the end of last year as the eurozone crisis took a turn for the worse and managed to regain market confidence with austerity measures and a series of structural reforms.

Investor concerns, however, have increased steadily in recent weeks, with Spain’s request for EU help to rescue its stricken banking system and a crucial upcoming vote on Greece’s future in the eurozone sparking fresh market turmoil. Schaeuble’s comments came ahead of a series of talks aimed at battling the crisis. French President Francois Hollande will meet Monti in Rome on Thursday, a week before a key 4-way summit with Italy, France, Germany and Spain.

Hollande’s visit marks a move beyond the usual Franco-German alliance, and Schaeuble said he hoped the new and ‘particularly close’ collaboration between Italy and France would give Monti the chance to act as a mediator.

He took a swipe at Paris, complaining that France was not measuring up to crisis-busting structural reforms, by allowing some workers to retire at 60 rather than increasing the retirement age in line with other EU countries.
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