Berlin calls for reforms to continue
Public frustration and private fear dominated German reaction yesterday to the Italian general election.
Leading Berlin politicians urged Italy to continue its fiscal consolidation path, despite voter rejection of the reform agenda of outgoing Italian prime minister Mario Monti.
German chancellor Angela Merkel told a closed-door meeting of her Christian Democrat (CDU) parliamentary party that it was the obligation of reform parties to “make the best” of the close election result.
As market nerves saw a widening of the risk premium on Italian sovereign bonds yesterday, German foreign minister Guido Westerwelle said it was in Italy and Europe’s interest for politicians to agree quickly a “stable government, capable of acting”.
“In the face of the debt crisis, we in Europe are all in the same boat,” he said.
“It is therefore important that everyone knows their responsibility to the whole and that everyone is guided by this responsibility.
“Political leaders in Rome know that Italy needs to continue the solid policies of reform and consolidation that will reinforce the trust of citizens and markets.”
German deputy chancellor Philipp Rösler said he had “expected a better result for Italy’s reform forces”.
“Decisive now for Italy – and all of Europe – is the quick formation of a stable government,” he said.
German industry leaders expressed concern that Italy faced a renewed “phase of political insecurity”.
“The task now is to achieve clarity to not further burden business or endanger investment projects,” said Markus Kerber, head of the BDI industry federation.