Monti Denies Berlusconi Threat and Pledges to Carry On

PM says question on threats to government should be asked to “everyone, including the parties and the markets, but not to me”

The government will not fall before the end of its natural term, even after People of Freedom leader Silvio Berlusconi’s statement on Saturday. “There is no such thing as a threat to withdraw confidence in this government because we would not see it as a threat. We were asked to make a contribution at a challenging time for the country. I cannot regard something that would deprive us of nothing as a threat. I believe it is best for us to carry on doing our job with a 2013 time horizon, as has always been our understanding. In any case, you should be asking this question to everyone else – the parties, the markets – but not to me”, said Italy’s prime minister, Mario Monti, in Madrid, where he was meeting the Spanish premier Mariano Rajoy.

BOND SPREADS AND MARKETS – “It hadn’t occurred to me but now I’ll think about it”. Mario Monti was replying in Madrid to questions about whether the latest bond spread spike was caused by the former prime minister’s statement. “We are confident that the current spread between Italian and German ten-year bonds is higher than is justified”, Mr Monti said. Whatever the case, the spread shield mechanism should be “implementable and not merely theoretical”, added the Italian PM, underlining that Italy does not intend “to activate this instrument”. Referring to the possible creation of a European super-commissioner, which has been put forward again by European Central Bank president Mario Draghi, Mr Monti pointed out that “setting more and more tests of fiscal virtue risks giving the markets, which are rather naive”, the impression that the instruments which are already in existence “do not work”.

English translation by Giles Watson

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