ROME (Reuters) – Prime Minister Mario Monti’s recently announced plan to sell state assets is likely to be hampered by depressed markets and political opposition, and economists say it will make only a marginal contribution to cutting Italy’s huge stock of debt.

As Italy’s borrowing costs rise, Monti has come under mounting pressure to accompany his tough austerity measures with asset sales that can eat into a debt worth more than 120 percent of output, the second highest in the euro zone after Greece’s.

ROME, June 25 (Reuters) – Antonio Fazio, the disgraced
former governor of the Bank of Italy, warned half-jokingly in
1998 that the euro would not be paradise but a “purgatory” that
would demand years of pain and sacrifice.

Currently appealing a conviction for improperly trying to
influence a bank takeover in 2005, Fazio is not much listened to
these days, but his words have turned out to be frighteningly
prophetic for Italy.

ROME, June 22 (Reuters) – The leaders of Germany, France,
Italy and Spain agreed on Friday on a 130 billion euros ($156
billion) package to try to revive economic growth in Europe but
differed over whether and how to launch joint bonds to combat
the euro zone’s debt crisis.

After a four-way summit in Rome’s Renaissance Villa Madama,
Italian Prime Minister Mario Monti said the European Union
should adopt a series of growth measures worth about 1 percent
of the region’s gross domestic product at a summit next week.

ROME, June 22 (Reuters) – The leaders of Germany, France,
Italy and Spain will try to find common ground in Rome on Friday
to restore confidence in the euro zone ahead of a full EU summit
next week, with German Chancellor Angela Merkel likely to be
outnumbered.

Dangerously high borrowing costs for Spain and Italy have
eased a little on market hopes for policy initiatives at the
Brussels summit on June 28/29. If it falls short, both countries
may be pushed closer to eventually needing sovereign bailouts.

ROME (Reuters) – An orderly Greek exit from the euro zone is impossible and its departure would have devastating consequences, former European Central Bank board member Lorenzo Bini Smaghi said on the eve of a Greek election that could determine whether it remains part of the single currency.

Bini Smaghi told Reuters in an interview that if Greece voted for parties that broadly accepted the bailout deal agreed with its international partners, he believed the terms would be eased to help the debt-stricken country.

ROME (Reuters) – Prime Minister Mario Monti no longer has the backing in parliament to adopt more reforms and Italy should consider holding an early election before the year-end, the economic spokesman for a major ruling party told Reuters on Sunday.

“In this political context and with this parliament, Monti does not have the strength to carry out more reforms,” said Stefano Fassina, economic spokesman of the centre-left Democratic Party (PD), one of the two main parties Monti depends on for his majority.

ROME (Reuters) – Prime Minister Mario Monti no longer has the backing in parliament to adopt more reforms and Italy should consider holding early elections in the autumn, the economic spokesman for a major ruling party told Reuters on Sunday.

“In this political context and with this parliament, Monti does not have the strength to carry out more reforms,” said Stefano Fassina, economic spokesman of the centre-left PD, one of the two main parties Monti depends on for his majority.

ROME, May 31 (Reuters) – Italy’s high level of taxation is
“incompatible” with strong economic growth and the country must
cut public spending to fund lower taxes, Bank of Italy Governor
Ignazio Visco said on Thursday.

In a keynote speech to the bank’s annual assembly, Visco
also urged Mario Monti’s technocrat government to take every
opportunity to sell state assets to cut Italy’s massive public
debt, equal to around 120 percent of output.

ROME, May 21 (Reuters) – Italy’s political parties had hoped
Beppe Grillo would fade away, but the comic who rails against
their corruption and ineptitude and says Italy should default on
its debt and quit the euro is going from strength to strength.

In local elections on Monday, Grillo’s Five-Star Movement
shook Italian politics by winning control of the northern city
of Parma and several smaller towns, capitalising on voter
discontent with economic stagnation and austerity.

ROME, May 15 (Reuters) – Italy’s economy slid further into
recession in the first three months of this year, the third
consecutive quarterly decline in activity and the steepest
economic contraction for three years, preliminary figures showed
on Tuesday.

The data showing a 0.8 percent contraction underscores the
task facing Prime Minister Mario Monti’s technocrat government,
which is trying to control Italy’s huge public debt – equal to
around 120 percent of output – in the face of a marked recession
and rising borrowing costs.