MILAN – ITALIAN Prime Minister Silvio Berlusconi on Tuesday urged parliament to adopt sweeping budget cuts quickly, as Italy and Spain moved to stem financial market contagion from Greece’s debt crisis.
‘We are on the frontlines in this battle,’ Mr Berlusconi said in a statement, calling for austerity measures to be approved in ‘a very short time frame.’
‘We have to be united and cohesive in the common interest,’ he said in a statement, as parliament promised adoption of the plan by the end of the week.
Spanish Prime Minister Jose Luis Rodriguez Zapatero meanwhile dismissed investor jitters, saying Spain?s ability to repay debts ‘has every guarantee.’ Mr Zapatero told a news conference that Spain’s borrowing costs had risen but said there should be ‘absolute calm’ about the financing of the state.
The benchmark FTSE Mib index in Milan inched up 0.13 per cent in afternoon trading, after plunges of more than three percent on Friday and Monday. The IBEX-35 index in Madrid was still down 1.37 per cent however.
Italy wants to reduce the budget deficit to 0.2 per cent of output by 2014 from 4.6 per cent last year but is struggling with one of the highest debt levels in the world and one of the lowest growth rates in Europe. — AFP
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