IMF Ready to Give Italy EUR 600 B in Rescue Aid - Report

Economist Mario Monti took of the seat of Italy's PM in mid-November in a bid to rescue it from the financial crisis, after Silvio Berlusconi resigned. EPA/BGNES

IMF inspections of Italy negotiated at the G20 summit in Cannes will be postponed to give the new Italian PM Mario Monti time to implement reforms, writes La Stampa.

At the same time, sources of the newspaper have stated that the International Monetary Fund is ready to give the financially troubled country a loan of EUR 400-600 B to help it overcome problems.

Reportedly IMF President Christine Lagarde considers that the sum, to be given to Italy at preferential interest rates, will allow the Monti cabinet 12-18 months to straighten up the country's finances.

According to La Stampa, the move has been made more probable by the resistance on the part of Germany on a heavy involvement of the European Central Bank in aiding EU member states hit by the financial crisis.

The article comments that the deepening of the debt crisis, in which a failure in Italy might bring down the entire eurozone, together with higher credibility for new PM Monti, have also motivated the move.

According to the publication, the IMF holds two other scenarios into account - namely the possibility that market react positively to the new cabinet's measures and release pressure on debt, and the possibility that Germany and France agree to boost EU and ECB aid.

La Stampa comments that the news of the readiness of the Monetary Fund to help Italy will play as another trump card in the hands of Monti in negotiations with other EU leaders.

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