Euro crisis threatens the existence of the EU — Italian PM

Italian prime minister Mario Monti has warned that the sovereign debt crisis in Europe is not only threatening the existence of the eurozone, but also the European Union itself.

Monti told German news magazine der Spiegel in an interview, published on Sunday, that Europe is facing a “psychological break-up”.

Strict conditions of budget cuts attached to bailout funds to struggling eurozone countries, such as Greece, have angered their citizens and Germany especially has been painted in a negative light.

Last week, European Central Bank chief Mario Draghi disappointed as he failed to deliver after promising to protect the euro at all costs. Politicians and investors had been expecting decisive measures, following Draghi’s pledge to do “whatever it takes to preserve the euro”.

But the bank left interest rates unchanged and postponed planned bond purchases of debt issued by the most troubled eurozone countries, such as Italy, until September.

Many economists believe the ECB’s decision is strongly influenced by Germany’s Bundesbank, which strongly opposes the buying of bonds. The German central bank also opposes any moves to give a banking license to the European permanent rescue fund, an idea which is supported by Monti.