Italian Prime Minister Mario Monti on Sunday rejected talk of a euro crisis and said Rome was open to the idea of a tax on financial transactions championed by France — but only if the measure was part of an EU-wide effort.
“The euro is not in crisis, the currency has solidly maintained its exchange rate with the dollar,” Monti said on RAI 3 public television, adding that Italy’s “banking system is not under threat.”
“The problem we are facing is that some EU countries have a public debt crisis,” he said. “Our crisis is a systemic crisis.”
Monti, a former European commissioner who took office as Italy’s prime minister and finance minister in November last year, said Italian commercial banks “are not under threat.”
His comments came as Italy’s top bank UniCredit on Wednesday set a low price for the share issue to raise the 7.5 billion euros (US$9.8 billion) it needs to meet new capital requirements, sending its share price plunging.
UniCredit said it would sell shares in the capital increase beginning yesterday at 1.943 euros each, which represents a 43 percent discount from their theoretical fair value based on the increase in the number of shares and the market price as of Tuesday last week.
Referring to plans for a tax on financial transactions, Monti said the government headed by his predecessor Silvio Berlusconi had voiced its opposition at the EU level.
“I, however, have expressed the Italian government’s openness on that issue,” he said on Sunday.
“We are prepared to work on it, but never, and I mean never, if it was to apply only to Italy. By contrast, at a time when it is in our interest to cooperate closely with Germany and France, why not,” he said.
French President Nicolas Sarkozy said on Friday that France should not wait for other European countries to get on board with the so-called Tobin tax, named after Nobel Prize-winning economist James Tobin.
Monti, who had already said on Friday he thought such a decision needed EU-wide backing, said his openness to the idea “has nothing to do with the fact that I was a student of professor Tobin.”
Britain, which fears for the future of the City of London financial district, has said it would block any move to introduce an EU-wide Tobin tax.
Sarkozy was to hold talks with German Chancellor Angela Merkel in Berlin yesterday to harmonize their stance ahead of a Jan. 30 European summit on the union’s debt crisis.
Monti, who is due in Berlin for talks with Merkel tomorrow, urged France not to go it alone and Germany also resisted the call, saying it was trying to build a broad consensus for such a levy.
“We would like to see a global financial transaction tax, but that is not possible at the present time,” Merkel’s spokesman Steffen Seibert told reporters at a regular news briefing.
“The German government would thus aim to introduce the financial transaction tax within the EU,” he added.
Seibert said the tax, which would have to be agreed unanimously within the EU, was one of several issues on the agenda for the two leaders, together dubbed “Merkozy.”
“It is mainly about preparing the European summit at the end of January and its goal is to debate measures to boost competitiveness and growth,” the spokesman said.
Adding to the pressure in the run-up to the Berlin meeting was a raft of disappointing economic data from the eurozone, including joblessness hovering at a record high and slumping consumer and business confidence.
Meanwhile, the euro tumbled to another 16-month low against the US dollar, falling under the US$1.27 mark and Italian borrowing costs rose above the 7 percent barrier that many economists consider to be unsustainable.
Also on Merkel and Sarkozy’s plate at the lunchtime meeting is Hungary, after the IMF and EU officials broke off talks over a possible credit line due to concerns over the independence of the central bank.
The tete-a-tete is the first of a series of high-level meetings to prepare the EU summit.
After Monti’s visit to Berlin tomorrow, a three-way France-Germany-Italy summit is scheduled to take place in Rome on Friday next week, three days before a key meeting of eurozone finance ministers in Brussels.