By Giada Zampano OF DOW JONES NEWSWIRES
BRUSSELS (Dow Jones)-Italy’s newly appointed prime minister Mario Monti said Wednesday that his country isn’t considering asking for aid from the International Monetary Fund to fight the debt crisis and added a new package of fiscal and structural measure will be delivered as early as next week.
Monti stopped short of quantifying the additional measures needed, but pledged they are aimed at meeting Italy’s target of balancing its budget by 2013.
In a joint press conference at the end of the Ecofin meeting in Brussels, Monti and his new deputy minister, Vittorio Grilli, said Italy, which is struggling to cut its enormous debt amid rising borrowing costs, will discuss and possibly approve the long-awaited measures at a cabinet meeting next Monday.
Monti said he provided “very few details” on the measures to its European counterparts, reiterating that the package will be hammered with the contribution of all the social parties involved.
The Italian premier is expected to introduce new measures that could bring in about EUR20 billion by 2013, two officials with direct knowledge of the matter said earlier Wednesday. The measures may include increases in sales taxes, new property taxes, an increase in the pension age and suspending inflation-indexed increases in some pensions, and will likely be tabled to Parliament in December, one of the officials said.
In a 16-page document presented to the Eurogroup of euro-zone finance ministers Tuesday, the European Commission said that Italy’s twin challenges of excessive public debt and slow economic growth “predate” the economic crisis and need to be addressed directly even now that a broader Europe-wide crisis solution is necessary.
The document, seen by Dow Jones Newswires, warns of a “self-fulfilling run from Italy’s sovereign debt” in which a liquidity crisis would turn into a solvency crisis and impose “acute” repercussions on other large euro-zone nations.
The Commission said Italy should shift the tax burden on to consumption and property to lessen the burden on labor and business.
The European Union’s executive arm also urged Monti to “frontload” some of the promised new pro-growth reforms he has promised.
Monti said Wednesday that Italy’s plans were welcomed by the Eurogroup partners and added that Italy shares the European Commission’s view that additional steps will have to be taken in 2012 to counterbalance lower growth forecasts.
The Italian premier then called for “social responsibility” and warned that a failure in delivering the necessary measures would have “serious consequences for everyone,” in Italy and abroad.
-By Giada Zampano, Dow Jones Newswires, +39 348 7678016; giada.zampano@dowjones.com
(Costas Paris contributed to this report.)
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