13.10.2011
By Simon Miller
Italy must go further to prevent itself from spiralling into greater debt, its chief banker has warned.
Yesterday, Bank of Italy governor Mario Draghi said Italy's fiscal policy decisions were not enough to fix its finances and said that the current austerity package - which aims for €54bn in tax rises and spending custs to balance the budget by 2013 - was in the right direction bit insufficient.
"We must act fast. The sorts of interest rate rises seen over the last three months, if protracted, could lead to an uncontrollable spiral," he said.
Draghi takes over as the head of the European Central bank next month and will be in charge of deciding whether the ECB should continue to but Italian government debt in the secondary markets.
Speaking at an event to commerate the 150th anniversary of Italy's unification, Draghi hinted that this policy may be coming to an end, warning that there would no repeat of history of where the locals "waited for an army from over the Alps" to help them.
"It's not like that now, nor was it then," said Darghi.
He added: "It's important that everybody is fully convinced that only Italians can save the Italian economy."
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