Germany at risk of bond yield 'own goal', warns Mario Monti

Mario Monti and Angela Merkel are to meet in Berlin on Wednesday for talks on the eurozone crisis

High bond spreads in some countries have created the potential for inflation in Germany, Mr Monti told Il Sole 24 Ore.

He also insisted that measures by Italy’s government are beginning to soothe market concerns and the country doesn’t need to tap European rescue funds at the moment.

Mr Monti's push for German action comes as he prepares to meet Chancellor Angela Merkel in Berlin on Wednesday for talks on the eurozone crisis.

"The focus of their talks will be, above all, the situation in the eurozone and the economic development in Europe," Ms Merkel's spokesman Steffen Seibert said.

Ms Merkel has embarked on a round of meetings on the eurozone crisis recently following the summer break over heightened fears for Greece but also concern for Italy and Spain, which have faced high borrowing costs on the financial markets.

The chancellor met French President Francois Hollande and Greek Prime Minister Antonis Samaras last week. She will also travel to Madrid in early September for talks with Prime Minister Mariano Rajoy.

Earlier his month, Mr Monti said that the the euro must not become a "break-up factor" that pits northern Europe against crisis-choked nations in the south of the continent.

"The biggest tragedy for Italy and for Europe would be to see the euro become, because of our failures, a break-up factor which awakens the prejudices of the north against the south, and vice-versa," he told an audience of young people in Rimini on the Adriatic coast.

resource:http://www.telegraph.co.uk/finance/financialcrisis/9505182/Germany-at-risk-of-bond-yield-own-goal-warns-Mario-Monti.html

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