Monti now says Italy may use EU rescue funds to solve debt problem

Italian Prime Minister Mario Monti said Italy may use EU rescue funds to settle their state debts, Ansa news agency said Wednesday.

We are reflecting on how to reinforce the stability of the eurozone via mechanisms that make it possible to reward virtue so that countries respecting the financial rules, like Italy, can have this recognized in terms of less abnormal spread levels, Mr. Monti said at the end of the G-20 Summit in Mexico.

He added that the prospect of using the European Financial Stability Facility (EFSF) to buy state debt would be discussed at a meeting involving leaders of Italy, Germany, France and Spain due in Rome on 22 June ahead of the EU Summit in Brussels on 28-29 June.

The technocrat stressed that using rescue funds in this way should not be confused with the idea that Italy was seeking a bailout.

Italy has seen its borrowing costs rise in recent months despite austerity measures and structural economic reforms, due to fears of contagion from other countries embroiled in the eurozone debt crisis, said Ansa.

The Eurozone debt crisis has forced Greece, Ireland and Portugal to seek international bailouts.

Following Spain's request of up to 100-B Euros (US$127-B) to EU earlier this month to support its struggling banks, there has been wide speculation that Italy could also need international aid.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels