Italy's outgoing prime minister has warned European leaders that the rigid austerity policies of the past three years have generated mass disaffection with the EU and a populist political backlash.

In a bitter valedictory statement to a two-day EU summit that ended in Brussels on Friday, Mario Monti, who was crushed in the recent Italian election – a result that stunned the EU elite – pleaded for greater scope on economic and fiscal policy in the crisis.

He complained that other countries such as France and the Netherlands were being granted more breathing space on their spending targets than he had been given over the past 16 months, and said that he had followed EU orders in his policymaking, an admission he did not emphasise during the election campaign.

In the letter, Monti, a liberal reformer who was the darling of Brussels but roundly rejected by Italian voters, voiced disappointment bordering on a sense of betrayal at the way he was treated by fellow EU leaders, most notably in Berlin and Brussels.

"Since November 2011," when he replaced Silvio Berlusconi as caretaker prime minister, "Italy has been delivering on all the policy objectives set out by the EU. In the meantime, some member states have been given extra time to reach their budgetary objectives," he complained.

"Not only has Italy not requested any extra time to perform its adjustment, but it did not request any financial assistance from the EU or any other international organisation. On the contrary, Italy has contributed to the financial assistance of other EU countries in need."

Attending his final EU summit, Monti warned that the leaders were not acting strongly and fast enough to combat record mass youth unemployment, storing up trouble for themselves at the ballot box.

"Public support for the reforms, and worse, for the European Union, is dramatically declining, following a trend which is also visible in many other countries across the union," he said. "To revive growth and fight long-term and youth unemployment would be the best message to counter the mounting wave of populism and disaffection with the European Union, showing that Europe is listening to people's concerns."

While pursuing an agenda of fiscal and structural reform in office, Monti regularly pleaded with Berlin for more flexibility over the eurozone crisis. Ironically, the summit finally agreed to adopt more room for manoeuvre in the application of the eurozone rule book, although this will do little more than soften the harsh edges of the austerity medicine.

Monti also called for the swift application of a German-inspired stick-and-carrot regime, which would see countries commit to "contracts" with the European commission on structural reform in return for funding rewards pegged to progress.

The details of the scheme are to be devised by EU authorities by June. But already the scheme has run into trouble – no decisions are expected in June and several countries are balking at the surrender of sovereignty entailed.