Italy to focus on growth, competitiveness in 2012: PM

Italian Prime Minister Mario Monti on Thursday said the "phase two" of his cabinet's austerity measures would especially focus on promoting economic growth and enhancing competitiveness. The new phase will further implement the three pillars of rigor, fairness and growth at the center of the first 30-billion-euro (38 billion U.S. dollars) package of the austerity plan approved by parliament last week, Monti said at the traditional end-of-year media conference. The prime minister said the new phase could be called "Grow Italy" after the first package named "Save Italy." In the next weeks, his emergency cabinet of technocrats will especially focus on growth by liberalizing closed professions, easing the labor market especially for young people, and promoting structural reforms, Monti said. The "phase one" and "phase two" are strongly linked, he pointed out, as "a consolidation of the public balance is not possible in the absence of growth." Monti stressed Italy's crucial role in the European Union (EU) and in the world economy, saying that "the international markets' instability is above all a EU-level problem, which need a response of solidarity and community." The EU itself needs to discipline its public balance and strengthen its economic union through allocating more consistent funds to aid those countries in need and enhancing economic dynamism in order to stimulate growth, he said. In the past weeks, Italy has taken an "active role" in doing its part, Monti said, adding that "although the purchases by the European Central Bank (ECB) of the Italian state bonds have almost stopped recently, the spread levels are trending lower." "The quite successful government bond auctions achieved on Wednesday and Thursday was an encouraging signal, although we do not consider the financial turmoil has ended," he said. Speaking of the sacrifices Italians will have to go through in terms of higher taxes and restrictions, which will inevitably lead to a recession in 2012, Monti said that "not asking these sacrifices would cause a much more severe recession and the collapse of the country." Timing is fundamental, the prime minister said, as "Europe is awaiting Italy in the two upcoming meetings, the Eurogroup on Jan. 23 and the European Council on Jan. 30, with additional measures taken and others scheduled in terms of growth, and we are working in view of these deadlines."