Italy acts to calm the markets

Italy acted to calm financial markets tonight after two days of eurozone talks in Brussels.

An emergency meeting of EU leaders later this week was also on the cards amid continuing speculation about the spread of the euro's woes to Italy, and possibly Spain.



The eurozone ministers - joined today by their non-eurozone counterparts, including Chancellor George Osborne - had been intending to be discuss a second Greek bail-out rather than talk down damaging speculation about the plight of the euro in Italy.



But all market attention was on Rome and the chances of the Italian parliament agreeing an austerity package this week - a move Prime Minister Silvio Berlusconi insisted would be enough to get a grip on debt reduction.



But his attack on the credentials of his own finance minister Giulio Tremonti was seen at least partly to blame for market jitters over Italy's financial state - because Mr Tremonti is seen as a steady hand at the tiller of the Italian Treasury.



This afternoon he flew back to Rome from Brussels, still visibly in his job despite fears that he would be sacked by Mr Berlusconi.



As markets fluctuated Mr Tremonti got on with the job of completing work on an austerity package involving an estimated £42 billion of savings - a deal Mr Berlusconi insisted would return Italian finances to "significant surplus", if endorsed by a majority of MPs.



Another meeting of EU leaders on the economic crisis, probably on Friday, would be designed to reassure jittery markets.



But the mere fact of more emergency talks threatened to worsen the volatile market response to what is seen as an escalating case of "contagion".



With one eye on the Italian situation, the eurozone ministers in Brussels assessed the details of another bail-out for Greece - considering even a partial default by the country involving bondholders extending credit deadlines to ease the Greek burden.



But alongside Italy, Greece is a small problem: Italy, as the EU's third largest economy, could pose serious financial problems about the scale of potential bail-out needed if austerity measures fail to bite.



If Spain needs help too, the current size of a new proposed EU bail-out fund due to be agreed this month may not be enough.



The fund - the European Stability Mechanism - involves only eurozone countries in future bail-outs and is fixed at about £440 billion.



The only concrete conclusion from the Brussels talks was an agreed statement reaffirming a combined commitment to maintain "financial stability" in the euro area.



But one official at the talks said: "Whatever we say or do, we are at the mercy of how market speculators interpret what is going on."

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee