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Italy sends mixed signals on Greek debt

Monday, February 2, 2015 - 19:11

[ROME] Italy on Monday issued mixed signals over whether it would back Greece in its fight for a renegotiation of its huge debts to international lenders.

Speaking to RTL Radio, Prime Minister Matteo Renzi reiterated his long-standing view that Europe must abandon austerity, while calling for "prudence and responsibility" in the handling of the Greek situation.

Renzi was speaking ahead of talks on Tuesday with Greece's new leftist prime minister, Alexis Tsipras, who is due to visit Rome, Brussels and Paris this week.

"Tomorrow we will meet Tsipras, and on February 12 we have the European Council (summit of EU leaders)," Renzi said.

"I believe it is crucial to send a clear message: we want to move the discussion on economic policy from austerity and rigour towards growth and investment.

"We have to change economic policy at the European level, not just for Greece or any other country." The comments will have encouraged Greek officials that their case will be given a sympathetic hearing in the Italian capital, but Renzi was vague on the specifics of any possible solution to the debt debate.

"As far as Greece is concerned, I believe there needs to be great seriousness, prudence and responsibility in how things are done," he said.

Eurozone governments are divided over how to respond to the election of the new government in Athens, with Germany in particular opposed to any relaxation in the conditions attached to the repayment of the 240 billion euros ($270) billion) the country received to stave off insolvency in the aftermath of the global financial crisis.

Renzi has been a fierce critic of the European Union's failure to adopt more growth-friendly policies since the crisis sent most of its economies into a downward spiral that is now threatening to descend into deflationary recession across the eurozone.

But the 40-year-old premier also has a close relationship with German Chancellor Angela Merkel, who has lavished praise on his efforts to reform Italy's labour market and institutions.

Renzi had a long telephone conversation with Merkel on Sunday and, according to Italian media reports, promised her he would not be forging a "Club Med" alliance with the Greeks and Spain, where anti-austerity party Podemos is rising fast on a similar platform to that of Tsipras's Syriza party.

Greece's cause was given a boost on Sunday when US President Barack Obama appeared to back an easing of the debt burden faced by Athens.

"You cannot keep on squeezing countries that are in the midst of depression," the US leader said.

AFP