European leaders increased pressure on Italian Prime Minister Silvio Berlusconi to say how he will reach budget-reduction targets as German lawmakers prepared to vote on a revamped euro-area bailout package that officials raced to complete before a summit tomorrow.
Italy needs to back up commitments with “specific actions” and come up with “clear timing,” European Commission spokesman Amadeu Altafaj said in Brussels today after a crisis Cabinet meeting yesterday failed to announce steps to spur growth. Berlusconi is writing a letter describing initiatives he’s planning to fight the crisis, two Italian officials said, adding that the proposals will be presented at the summit.
The focus on Italy underscored a push by leaders to prevent the Greece-fueled debt crisis from swamping the third-biggest euro economy and piling risks onto France and Germany. Policy makers, pressed by politicians and investors around the world, are struggling to devise a plan that persuades markets they can stamp out the contagion.
“The package is likely to represent the turn of a corner in the European debt crisis, but it will not be a ‘one strike, the crisis is over’ sort of thing, simply because there is no such strike available to policy makers,” said Erik Nielsen, global chief economist at UniCredit SpA. (UCG) “The key is to convince the market that policy makers can and will do what’s necessary, and here the Europeans have a more complicated task than most others.”
