Monday, March 22, 2010

Berlusconi 'absolutely in favour' of giving aid to Greece

Italy has long been considered one of the weak links in the euro zone but Prime Minister Silvio Berlusconi told Reuters at an election rally in Bologna on Sunday that he was "absolutely in favour" of the EU providing aid to Greece.

He later hardened his stance, saying the European Union had "no reason to exist" if its members were not ready to help a crisis-hit eurozone country.

Italy's debt-to-GDP ratio is projected to hit 117% this year, compared to 120% forecast for Greece, though Rome has kept a lid on its budget deficit and has weathered the financial crisis better than others in Europe.

Uncertainty over European support for Greece pushed the euro as low as $1.3502 on Friday, its weakest level in more than two weeks. The spread between Greek and benchmark German bond yields ended the week at 325 basis points, the highest level in nearly three weeks.

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