Italian economic system 'not fragile'

Italy's economic system is "not fragile" although it has some weak points, notably a high level of debt, Prime Minister Mario Monti said on Wednesday, as Rome comes under pressure on the markets. Speaking after receiving a prize from a business school here, Monti told reporters: "The Italian system isn't fragile. There are aspects that are less solid, like the high level of debt and elements that are more solid ... notably our banking system." "We Italians have a tendency to go too quickly from moments of inexplicable euphoria to unjustified depression," he quipped. Nevertheless, there were some positive strengths of the Italian economy, for example a powerful network of small and medium-sized businesses and households that have a low level of debt, Monti stressed. "We don't need to resort to desperate measures for our public finances," he said, adding he would pursue Italy's course of fiscal consolidation. After Spain announced it would seek EU aid of some 100 billion euros ($125 billion) to recapitalise its crisis-wracked banks, market attention has switched to Italy, buried under one of the eurozone's highest debt mountains. While former EU commissioner Monti has generally regained market confidence after taking over from former prime minister Silvio Berlusconi last year, Italy's borrowing costs have shot up in recent days amid fresh market turmoil. The yield on the benchmark 10-year government bond has risen over the 6.0-percent barrier generally seen as unsustainable over the long-term. At a auction of 12-month debt earlier on Wednesday, Italy's rates spiked sharply to 3.972 percent from 2.34 percent at a similar operation on May 11.