Italy’s new Prime Minister Mario Monti who took over from Silvio Berlusconi unveiled sweeping reforms to recover Italy’s economy from what he called a “serious crises”
“Only if we can avoid being seen as the weak link of Europe can we contribute to European reforms,” said Monti, who was sworn in on Wednesday as head of a government of experts to reduce the burden of the Eurozone crises on Italy.
Also, in Greece things got tougher for the new government headed by Prime Minister Lucas Papademos, a former vice president of the European Central Bank as 50,000 protestors came into the streets to oppose the reforms of cutting spending and rise in taxes.
The euro fell in response of the initiatives taken Italy. France fared a little better, but again had to pay markedly more to shift nearly 7 billion euros of government paper. Fears that the euro zone’s second largest economy is getting sucked into the debt maelstrom have taken the two-year-old crisis to a new level this week.
With Italy’s borrowing costs now at unsustainable levels, Monti will have to work fast to calm financial markets, given that Italy needs to refinance some 200 billion euros ($273 billion) of bonds by the end of April.
Report by Adhir Roy Chowdury