Italy PM says to meet budget goal, not seeking IMF aid

Prime Minister Mario Monti pledged measures to ensure that Italy meets its goal of balancing the budget even if economic prospects worsen, and said no approach for help had been made to the International Monetary Fund.

Monti, attending his first meeting of European finance ministers since taking office, said he had outlined measures that he will present to the cabinet on Monday to bring public finances under control, and had received a "very positive" response from partners.

"I confirmed the objective of a balanced budget in 2013," he told a news conference.

He said the programme, combining measures pledged by former Prime Minister Silvio Berlusconi's centre-right government and further structural reforms, would ensure the goal was reached "even in the face of a possible deterioration in the economic cycle which may be greater than expected."

Italy, one of the world's most heavily indebted and slowest growing economies, faces the prospect of recession next year with the Organisation for Economic Cooperation and Development forecasting gross domestic product will contract by 0.5 percent.

Monti, who holds the finance portfolio alongside his position as premier, is expected to announce measures including an increase in pension ages, a revamped housing tax and a wealth tax on private assets.

Monday's announcement will be vital to re-establishing Italy's shattered credibility with financial markets after a series of unfulfilled reform promises by the previous centre-right government.

"If Italy misses this challenge, or does less than what is expected of it, the consequences would be very serious for everybody," Monti said.

He said the "vast operation" to be unveiled on Monday would focus on both budget cuts and measures to boost growth, and he appealed to "a common sense of urgency" while pledging to consult unions which have opposed changes to the pension system.