Bundesbank chief: No bailout guarantee for Italy

Bundesbank chief: No bailout guarantee for Italy
Photo: DPA
The head of Germany's central bank has told Italy to stick to its pledges of budget cuts and economic reforms, warning there was no guarantee of being bailed out.

“Citizens and the government decide national policy, and must bear the consequences,” Bundesbank president Jens Weidmann told the weekly Focus magazine, according to interview excerpts released Saturday.

“When major political players in Italy discuss a reversal of reforms or even an exit of Italy from the eurozone and consequently Italian bond yields rise, this should not and cannot be a reason for the intervention of the central bank,” Weidmann said.

Elections in Italy last month ended in a stalemate in parliament between right and left. Campaigning had been marked by a reaction against the austerity measures pushed by German Chancellor Angela Merkel in a bid to beat the eurozone debt crisis that has propelled the 17-nation bloc into recession.

On Wednesday Beppe Grillo, head of the anti-establishment Five Star Movement which unexpectedly captured a quarter of the vote in the inconclusive Italian elections, said Italy was already essentially out of the euro.

Grillo has so far refused to form a coalition with Pier Luigi Bersani, whose leftist party came out on top in the elections, nor with ex-premier Silvio Berlusconi’s conservatives. His party has spooked Europe with its promise to hold a referendum on the euro and cancel Italy’s debts.

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