Obama praises Italian leader’s economic efforts

Feb 9, 2012, 11:53 PM

KTAR.com

Associated Press

WASHINGTON (AP) – Eager for Europe to contain its economic troubles, President Barack Obama praised Italian Premier Mario Monti on Thursday for his efforts to lead Italy out of its fiscal quagmire. The president said Monti has boosted confidence in Italy throughout Europe and in the marketplace.

Obama said he appreciated Monti’s “strong start” at the helm of the European nation. Monti, who replaced Silvio Berlusconi in November, inherited a massive national debt and international pressure to pull Italy out of its troubles.

Since then, the Yale University-educated economist has won acclaim for his initial steps, including budget cuts, tax increases and eased regulations.

Obama said Monti has reassured the international community that “Italy has a plan that takes seriously its fiscal responsibilities, but also emphasizes the need for structural reforms that can promote growth.”

The president had kept his distance from Berlusconi as the Italian leader battled endless sex scandals and corruption trials while the country’s economy crumbled, but he’s welcomed Monti’s arrival. Rome is going ahead with sanctions on Iranian oil purchases and has moved in lockstep with Washington on policy toward Syria, withdrawing its ambassador Tuesday, as America did.

Monti is on a U.S. visit to promote his economic agenda and attract investors as he seeks to reduce Italy’s $2.5 trillion debt.

Monti has said all Italians must make sacrifices and has renounced his own salary as premier and economy minister. But he faces a tough battle as taxi drivers, pharmacists, truck drivers and others from sectors he is seeking to liberalize have staged angry strikes. Italy’s small business lobbies have stifled the country’s economy by blocking competition, keeping work hours short and perpetuating inefficiencies in business practices.

“I just want to say how much we appreciate the strong start that he has embarked on and the very effective measures that he is promoting inside of Italy,” Obama said.

Monti, seated at Obama’s side in the Oval Office, said the changes he has promoted, however painful they have been in the short term, appear to be accepted by the Italian public.

He said Obama’s supportive words “are an encouragement for my government to persist along these lines.”

The two leaders also discussed the Middle East and upcoming economic and NATO summits in Chicago. Obama thanked Monti for Italian assistance in Afghanistan and for the role Italy played in enforcing a new fly zone over Libya that ultimately resulted in toppling strongman Moammar Gadhafi.

The meeting came as Greece’s political leaders struck a deal Thursday to make deep cuts in government spending to avert a default that could reverberate across the world financial system.

The European debt crisis poses a significant threat to the United States and its modest economic recovery. With the fate of the euro in the balance, Obama has been watching developments in Europe warily.

Speaking to reporters at the end of his meeting with Monti, Obama reiterated his call for Europe to create a large enough financial “firewall” to prevent any one European nation’s crisis from spreading.

In written responses to questions posed by the Italian newspaper La Stampa published Thursday, Obama said European and U.S. economic fortunes are “inextricably linked.”

“When Europe is doing well, it’s good for American jobs and businesses,” Obama said. “When growth in Europe slows or your financial markets are unsettled, we feel the consequences, just as you felt the impact of the U.S. financial crisis four years ago.

Earlier, speaking at the Peterson Institute for International Economics in Washington, Monti said the economic troubles have forced the EU to confront some of its structural problems and fix them.