U.S. Treasury Secretary Timothy Geithner praised Italy's new austerity plan Thursday, saying Premier Mario Monti's plan is a step in the right direction.
"Monti has committed to a very strong program of economic reforms," Geithner told The Associated Press after a meeting with the premier. "Of course, the leaders of Europe are also working to strengthen the financial firewall that is essential for economic reforms in Italy and Europe to work," Geithner added. "These are vital and critical and also very challenging reforms, and they will take time, and I think we, the world, can be encouraged by the progress of these past weeks."
Monti, who will visit the White House in January, Geithner announced, is an economist and former EU commissioner. He hopes to save 30 billion euors ($40 billion) and reinvest 10 billion euros ($13.4 billion) from those measures to build growth. The plan includes new taxes and spending cuts.
Monti is attempting to balance Italy's budget by 2013 and help its credit rating. The Fitch credit rating agency said Thursday the rating is likely to benefit, but that the outlook on Italy's A+ rating remains negative, and that the country has to tap bond markets at sustainable rates, and refinance 200 billion euros ($268 billion) by the end of April.
