Greece will probably remain in the eurozone, Italian Prime Minister Mario Monti said on Thursday, but demands made of Greece by its partners had been unrealistic and far reaching economic reform could take decades to achieve.
“Anything can happen, but I think the most probable outcome is the one which is most positive for Greece and for all of us,” Monti said on an Italian television talk show, when asked if he believed Greece would stay in the currency bloc.
Greece’s eurozone partners had been wrong to insist on a process of reforms and fiscal adjustment which was too fast for the country to withstand, Monti said.
“Europe has to learn how to not take too much of a short-term view,” he said, adding the reforms needed in Greece would take a generation, rather than two or three years as its partners had demanded.
“Greece has lost its sovereignty; it’s under the instructions of the IMF, the ECB, the European Commission. Having the others tell you, ‘here is the money but I’m deciding,’ must be a terrible humiliation.”
He earlier told a news conference that he did not expect it would be long before European countries were ready to introduce common eurozone bonds.
“Italy is very much in favour of the creation of euro bonds when the time is right, and we do not expect it to be too far off,” Monti said during a news conference.
Turning to Italy, Monti told the television show said he was in favour of privatising state assets to help cut debt, including utilities in the hands of local authorities, and the government would soon announce measures on this front.
“I am in favour (of privatisations) and having done the preparatory work, now we are able to accelerate,” he said.
However, he cautioned it was not possible to launch a massive privatisation programme like Italy did in 1990s, partly because of depressed market conditions and partly because so much had already been sold.
Monti, whose popularity has fallen sharply this year as Italians have felt the effect of austerity measures made up largely of tax hikes, said he felt he still had sufficient backing in parliament.
“It seems to me that the parties support this government, even if that involves significant sacrifices for them,” he said.
Asked about reforms needed of Italy’s banks, Monti said the most important thing was to integrate banking supervision at the European Union level, adding that this had been discussed at this week’s meeting of EU leaders in Brussels.