Thu Jul 5, 2012 3:37AM
As Italy faces soaring borrowing costs, Prime Minister Mario Monti denies his country needs bailout aid. But a meeting between Monti and German Chancellor Angela Merkel has raised question as to how far Berlin is willing to go to tackle the euro crisis.
On Wednesday Italian Prime Minister Mario Monti and German Chancellor Angela Merkel took part in a bilateral meeting held in Rome to discuss in details the accord reached at last week's EU summit in Brussels on the eurozone crisis. On June 29, Berlin made major concessions to Italy, allowing European rescue funds to be used to support the bonds of countries facing soaring borrowing costs. Italian and international media portrayed this as a key victory that Monti obtained at the expense of the German government, hinting at an antagonism between Rome and Berlin that the two leaders firmly denied. The Netherlands and Finland have recently raised doubts about the bond-support agreement obtained in Brussels last week. Even though EU Council President Herman Van Rompuy has said that the two nations would not be able to veto it, Merkel stated that those countries' reservations should be respected. This has led to speculation the German chancellor may be working behind the scenes to use the Netherlands and Finland against the agreement. Germany has been facing mounting pressure from some of its eurozone most influential partners to soften Its fierce resistance to jointly issued eurobonds or other forms of debt pooling. However German Chancellor Angela Merkel has reiterated her opposition to the introduction of euro bonds. However, according to economy experts, Merkel may soon drop her opposition to the introduction of Eurobonds. The concessions made in Brussels last week, could suggest that Germany is opening to a more inclusive and multilateral dialogue with its EU counterparts. During Wednesday's summit Merkel reiterated the close ties existing between the eurozone countries. By the end of the summit, Monti denied Italy needs bailout aid. The Italian Prime Minister pointed out that Italy's economic situation bears no resemblance to that of Greece, Ireland or Portugal and that the country will not be needing help to finance its deficit.