Italy, Britain urge more EU focus on growth

Italy, Britain, the Netherlands and nine other countries called on Monday for Europe to shift its focus from tough budget cuts towards measures to create growth as the region looks headed for its second recession in three years.

Germany and France, the euro zone's two leading powers, declined to sign the letter addressed to top European Union officials, which implicitly challenged the German-led drive for austerity first.

It was the second time in a month that Italian Prime Minister Mario Monti, an economist praised by German Chancellor Angela Merkel for his strong measures to handle Rome's own debt crisis, has criticised the north European approach on budgets.

"The crisis we are facing is also a crisis of growth," said the letter to the President of the European Council, Herman Van Rompuy, and the President of the European Commission, Jose Manuel Barroso.

The letter, advocating greater opening of the EU's internal market for services, was signed by the leaders of Britain, Estonia, Latvia, Finland, Ireland, Czech Republic, Slovakia, Spain, Sweden, Poland, Italy and the Netherlands.

"We gave it to many governments, including the French and the Germans, but our cooperation continued with those who showed an interest to go ahead," Enzo Moavero, Italy's European Affairs Minister, told reporters in Brussels.

Another source from one of the signatory countries, who declined to be identified, said Paris and Berlin were not so supportive of their free market agenda.

"France and Germany do not sign letters they do not draft themselves," the source said.

Euro zone finance ministers are expected to back a second bailout for Greece on Monday bringing to a close months of wrangling over a deal to reduce the country's debt burden and prevent a disorderly default.

While Greece's problems have been a focus of the crisis, another major aspect has been a sharp slow down in growth across the bloc as countries cut spending to improve their fiscal accounts in order and as news of the troubles hurt confidence.