Germany, Italy vow to protect eurozone

The German and Italian leaders have pledged to do everything to protect the eurozone, the German government said on Sunday — further underlining European politicians’ determination to get a grip on the continent’s debt crisis, but again offering no details of any action.

By (AP)

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Published: Mon 30 Jul 2012, 11:04 PM

Last updated: Tue 7 Apr 2015, 12:23 PM

Chancellor Angela Merkel and Premier Mario Monti spoke by phone on Saturday and “agreed that Germany and Italy will do everything to protect the eurozone,” German government spokesman Georg Streiter said in a statement.

That was near-identical to the wording of a statement issued on Friday by Merkel and French President Francois Hollande, which in turn came a day after Mario Draghi, president of the European Central Bank, said the ECB would do “whatever it takes” to preserve the euro.

None of the leaders have said anything about any specific action. But the comments raised expectations that the ECB might step in to buy Spanish and perhaps Italian government bonds to lower the countries’ borrowing costs, which have been worryingly high in recent weeks. Merkel and Monti agreed that decisions made by last month’s European Union summit “must be implemented as quickly as possible,” Streiter said, again echoing Friday’s Merkel-Hollande statement.

Those included allowing Europe’s bailout fund — once a new, independent bank supervisor is set up — to give money directly to a country’s banks, rather than via the government. Countries that pledge to implement reforms demanded by the EU’s executive Commission also would be able to tap rescue funds without having to go through the kind of tough austerity measures demanded of Greece, Portugal and Ireland.

Merkel invited Monti to visit Berlin in the second half of August and he accepted the invitation, the German government said.

The assurances come as concern flares again about Greece. International debt inspectors are scrutinising Greece’s finances and its progress in implementing unpopular budget cuts and reforms demanded in exchange for the rescue loan programme that is keeping the country afloat.

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