Individual euro zone countries face “escalating speculative attacks” unless a lasting solution to Europe's financial crisis is found at next week's summit of EU leaders, Italian Prime Minister Mario Monti told the Guardian on Friday.
Without a successful outcome at the summit, “there would be progressively greater speculative attacks on individual countries, with harassment of the weaker countries,” Monti said.
The attacks would be focused not only on those who had failed to respect EU guidelines, he said, but also on those like Italy, with high debt accumulated, according to the newspaper.
Next week's summit is expected to tackle long-term plans for closer fiscal and banking union in a bid to strengthen the euro's foundations, after bailouts for Greece, Ireland and Portugal failed to end a 2-1/2-year old debt crisis.
To pave the way, Monti and the leaders of Germany, France and Spain will meet on Friday in Rome.
“A large part of Europe would find itself having to continue to put up with very high interest rates that would then impact on the states and also indirectly on firms. This is the direct opposite of what is needed for economic growth,” Monti said.
Aware of the popular shift against his government, Monti said that, faced with creeping economic paralysis, “the frustration of the public towards Europe would grow” unless the summit failed to resolve the crisis quickly.
Monti said euro zone leaders were working on a plan designed to halt the spread of debt contagion while satisfying Germany's refusal to sanction financial irresponsibility.
The plan, he is cited as saying, was one of the “absolutely necessary” outcomes of next week's summit.
The solution to stem market pressure ahead of the summit, and the growing tide of anti-EU sentiment in Italy and the EU, is more integration, according to Monti.
“Europeans know where they're going the markets are convinced that having given birth to the euro, the will [of the member states] to make it indissoluble and irrevocable is there and will be strengthened by other steps towards integration,” he is quoted as saying. - Reuters