Italy's PM: No Nation Can Fight Debt Crisis Alone

Published January 7, 2012 1:54PM (EST)

ROME (AP) — No European nation is strong enough to ride out the continent's debt crisis alone, Italy's new premier insisted Saturday, urging fellow EU members to develop a common growth policy.

Premier Mario Monti, leader of the eurozone's third-largest economy, is an economist who came to power in November with a mandate to pull Italy back from the brink of financial disaster.

"Italy, in order to develop economically and socially, needs Europe, and Europe to be stronger needs Italy," Monti said in a speech in the northern city of Reggio Emilia at a ceremony honoring the Italian flag.

"No European country is so strong to think it can go forward alone in facing the great global economies," he added. "It's time for everyone to do their homework. No one can think they can do less than the others."

Monti didn't single out any country, but some critics have felt that Germany has been putting its own economic policy ahead of EU-wide interests. Monti will meet with German Chancellor Angela Merkel in Berlin on Wednesday, and at a major European summit in Brussels at the end of the month.

EU leaders at that summit will be wrestling with a worsening economic outlook, as more European nations tip over into recession, skepticism keeps rising over many EU countries' bonds and the survival of the sinking euro remains in doubt.

Monti has successfully prodded Italy's often slow-moving parliament into approving quick spending cuts, new and higher taxes and reforms to the long-generous pension system that will see Italians working longer and retiring later.

"Italy is doing its part. Now the other European Union countries should do the same," Monti.

While praising Italy's "decisive contribution" in fighting the European financial crisis, Monti also tried to rally Italians to combat two chronically stubborn problems: corruption and widespread tax evasion by companies and citizens alike.

Foreign investors are frequently discouraged from operating in Italy, where bureaucrats and politicians are often involved in corruption when it comes to securing permits, contracts or funding.

Monti's next priority is spurring growth in Italy, where the economy is stagnant, women have one of the EU's lowest rates of employment and youth joblessness rates run 30 percent nationally and much higher in the underdeveloped south.

But unions have vowed strikes and rallies to protest the government's plan to overhaul labor laws protecting workers, including abolishing a provision that makes it very difficult to fire workers.

Lawmakers, with an eye on 2013 elections, may also be nervous about demanding their voters make financial sacrifices.

By Salon Staff

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