Mario Monti Due In Downing Street For Talks With David Cameron

'Super' Mario Due In Downing Street For Eurozone Talks With PM

Prime Minister David Cameron will today hold talks on the eurozone debt crisis with the leader of one of the countries at the heart of the storm, Italy's Mario Monti.

He has warned of the danger of a "powerful backlash" against austerity measures among voters in countries such as Italy which are being forced to make deep cuts in state spending to pay off debt.

Following today's talks at 10 Downing Street, which Mr Cameron's spokesman said would focus on the economic situation and the upcoming EU leaders' summit in Brussels on January 30, Mr Monti will visit the City to reassure investors of Rome's determination to get its finances under control.

The academic economist and former European Commissioner was installed as a "technocratic" replacement for Silvio Berlusconi as prime minister in November, and will use his visit to the London Stock Exchange to explain how his government has changed the direction of Italy's economic policy.

The decision of credit rating agency Standard & Poor's to downgrade Italian debt two notches to BBB+ last Friday scotched hopes in Rome that the crisis may have passed its peak, after the interest charged on government bonds fell below 5% in an auction that morning.

Mr Monti, who met European Council president Herman van Rompuy on Monday, will welcome German chancellor Angela Merkel and French president Nicolas Sarkozy to Rome on Friday for a second trilateral meeting to discuss plans for a compact to instil new fiscal discipline in eurozone states.

He yesterday urged Ms Merkel to recognise that it was in Germany's "enlightened self-interest" to put its weight behind measures to lower the borrowing costs of highly indebted countries such as Italy - which could involve putting more money into the eurozone's rescue funds or backing Europe-wide eurobonds.

The "informal" European Council meeting on January 30 is intended to focus on measures to speed Europe's recovery by bolstering growth and competitiveness, but is certain to feature continued discussions about the new eurozone compact.

Britain will not sign up to the agreement being drafted by the other 26 EU states, after Mr Cameron dramatically exercised the UK's veto at the last summit in December. Agreement of a final text is expected in March.

Discussion of the January 30 meeting dominated Cabinet yesterday, where ministers agreed that it should focus on the completion of the single market, boosting competitiveness and enhancing trade with the rest of the world - issues which have been forced off the agenda at recent summits by the long-running sovereign debt crisis.

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