The leaders of the eurozone's four largest economies on Friday began crisis talks in Rome which are seen as crucial for preventing a possible collapse of the single currency.
The meeting between Italian Prime Minister Mario Monti, German
Chancellor Angela Merkel, French President Francois Hollande and
Spanish Prime Minister Mariano Rajoy is overshadowed by fears that
Spain and Italy would need bailouts after their borrowing costs
spiked.
In an interview with six leading European newspapers published
Friday, Monti stressed that the outcome of the meeting could
determine the success or failure of a June 28 and 29 European Union
summit in Brussels which will focus on solving the economic crisis.
If EU leaders fail to come up with plans to deal with contagion
threat that began in Greece and has spread to Spain and Italy, "there
would be progressively greater speculative attacks on individual
countries, with harassment of the weaker countries," Monti said.
In such a scenario, "the frustration of the public towards Europe
would grow," the Italian premier was quoted as saying by Britain's
The Guardian, one of the six newspapers which interviewed him.
"To emerge in good shape from the crisis of the eurozone and the
European economy, ever more integration is needed," Monti said.
But he warned that if the summit failed to resolve the problems
quickly, "public opinion, but also that of the governments and
parliament ... will turn against that greater integration."
However, speaking just before the meeting, Merkel's deputy
spokesman indicated that no decisions would be announced.
The talks with Italy, France and Spain were not formal
consultations but just an exchange of views, Georg Streiter said in
Berlin.
"It's really just a visit," he said of Merkel's trip.
Meanwhile, German Foreign Minister Guido Westerwelle told France's
Le Figaro newspaper that the eurozone crisis had "shown the need to
accelerate integration" in Europe.
"No investor will bank on Europe unless he feels that Europe
believes in itself and is working to move forward," said Westerwelle,
who is heading a study group of EU foreign ministers on the future of
Europe.
"We must have a taboo-free discussion on ways of reinforcing
Europe to make it more effective and capable of taking action," he
said.
Monti and Westerwelle's remarks came a day after the International
Monetary Fund (IMF) challenged the way the eurozone was trying to
solve its crisis by calling for more action from the European Central
Bank (ECB) and criticising the terms of a Spanish bank rescue.
The IMF urged "a more creative and inventive monetary policy" that
might involve a reactivation of the ECB's bond-buying programme,
which last year helped contain a surge in Italian and Spanish bond
yields.
Spain and Italy have seen yields on their government bonds soar
over the last week, with Spain's borrowing costs, in particular,
reaching what many analysts consider to be unsustainable levels.
At the Rome talks, Monti is expected to try and bridge a split in
the approaches favoured by Germany and France in dealing with the
debt crisis.
Merkel has continued to champion the need for budget discipline as
the primary tool to fight the crisis. Hollande has said that the
focus should be on stimulating economic growth.
