News24

Monti the main man at money meeting

2011-11-28 12:19

Brussels - Italy's new Prime Minister Mario Monti takes centre-stage on Tuesday when euro finance ministers gather here for their last scheduled meeting of the year with partners concerned over IMF rescue planning.

The former EU commissioner gave himself the finance ministerial portfolio in the new unity government that took over from the coalition led by Silvio Berlusconi.

Monti is expected to unveil plans for accelerated reform at the meeting.

"The meeting is notionally about Greece, progress on leveraging up the size of the euro rescue fund and plans to ensure the medium-term liquidity of Europe's banks," said a European Union official, a veteran of such gatherings.

"But it will mostly revolve around Monti," he added.

IMF preparing loans - report

Detailed budget measures, which require final parliamentary approval, are due by a December 9 EU summit.

But Olli Rehn, European commissioner for economic and monetary affairs, suggested a more "ambitious timetable" was needed during a visit to Rome on Friday. Rehn will also attend the Brussels gathering.

Respected Italian daily La Stampa reported on Sunday that International Monetary Fund officials were preparing loans to the value of €600bn as a contingency.

That would give the Italian government up to 18 months' breathing space - as it has to refinance a staggering €400bn in debt next year.

Italy is the world's third-biggest sovereign borrower after the US and Japan. La Stampa's report suggested that this massive funding need meant the European Central Bank could become involved, using IMF guarantees.

€2trillion public debt

Contacted by AFP, the IMF declined to comment, but French President Nicolas Sarkozy's office made it clear that any problem with Italy would hit "the heart of the eurozone".

Prior to being forced from office, Berlusconi turned down an offer of financial aid from the IMF.

"We believed it was not adequate," he said in an interview on Sunday.

Italy's nearly €2trillion public debt heading into certain 2012 recession means anything more than a private discussion about such a rescue is not on the agenda in these talks.

So Tuesday's meeting, starting at 16:00 GMT, will begin with a decision - repeatedly delayed since August - on releasing an €8bn tranche of loans to Athens.