Italy's new prime minister Mario Monti said on Tuesday he is committed to turning around the country, but he offered no new details on how he will deliver broad reforms to invigorate the euro zone's third-largest economy.
Speaking following his first meetings in Brussels since taking office, Monti said he was determined to win back investor confidence after Italy's short-term borrowing costs surged to levels seen as unsustainable, striking the 17-nation euro zone to its core.
We can get to the bottom... to the heart of structural reforms in Italy, Monti said, flanked by European Commission President Jose Manuel Barroso.
As far as the issue of public finances goes, I've already said ...that, in general terms, we'll respect the commitments undertaken by my government, Monti told a news conference.
Monti's new government of technocrats, supported by almost all Italy's main parties, will focus first on enacting austerity measures passed by the previous, scandal-plagued government of Silvio Berlusconi.
These measures aim to balance the budget in 2013 and halt the rise in Italy's debt, which is already around 120 percent of gross domestic product.
Monti has secured huge support from a parliament spooked by a sudden jump in Italian borrowing costs, but he could face a battle as he tries to win backing for greater austerity or to implement a pledge to liberalise the economy.
Italian 10-year bond yields rose slightly on Tuesday to 6.73 percent in a sign of continuing stress in markets unnerved by a T-bill auction that saw Spain's short-term borrowing costs hit a 14-year high.
The European Central Bank has been sporadically buying Spanish and Italian government bonds to prevent prices spiking to unaffordable levels, but the limited, stop-go purchases have failed to provide durable relief.
Under Berlusconi, opaque pledges and a lack of detail on measures to speed up deficit reduction undermined investor confidence that the country has yet to regain.
Monti, a former EU competition commissioner who favours greater European integration, evaded questions about his economic plans, and said his talks with Barroso were very general, particularly on budget issues.
Asked specifically about whether Italy would achieve a balanced budget for 2013, Monti said: We didn't get into that in specific terms with President Barroso.
We discussed it only in general terms for the European Union, and not for Italy, he said. That was the issue of whether you need to take into account the economic cycle in determining how (countries) do in meeting their objectives.
Monti, who also met the President of the European Council, Herman Van Rompuy, said that his new government was focussed not only on fiscal discipline but also on boosting economic growth.
There will be a strong element of continuity as regards Italy's fiscal consolidation efforts, he said. But there will be more attention paid to growth.
(Additional reporting by Christopher Le Coq and Luke Baker; Editing by John Stonestreet)