ROME (Reuters) ? Italian Prime Minister Mario Monti prepared for a New Year campaign to reassure European partners that his technocrat government can boost the ailing economy, with an unexpected and apparently private visit to Brussels on Thursday.
Monti flew to the Belgian capital, where he previously worked as a European commissioner, ahead of a series of meetings with European leaders aimed at rebuilding confidence in Italy's battered public finances.
"Europe has no reason to fear Italy any more," Monti told the French daily Le Figaro ahead of a one-day visit to Paris, where he will meet French President Nicolas and Prime Minister Francois Fillon on Friday and speak at a conference at the Finance Ministry.
Italy, the euro zone's third largest economy, still poses the biggest threat to the bloc and a debt emergency would overwhelm the bloc's existing defenses and potentially destroy the single currency.
On Thursday, the yield on its 10-year bonds stood at more than 7 percent, around the level which tipped Greece into seeking an international bailout.
Monti will meet German Chancellor Angela Merkel in Berlin on January 11 and British Prime Minister David Cameron in London on January 18 before a summit of European Union leaders in Brussels at the end of the month.
He will add his support to efforts to bind the euro zone's disparate economies more closely together and he will argue for the European Financial Stability Facility, the bloc's bailout fund, to be beefed up.
He has also said he wants to bridge the gap between France and Germany, the EU's two driving powers, and Britain following the rancorous summit in December, which drove a deep wedge between London and its European partners.
UNTENABLE
Monti's appointment as prime minister in November was greeted enthusiastically by partners exasperated by his scandal-prone predecessor Silvio Berlusconi, but Italy is still struggling to contain an escalating debt crisis that threatens the entire euro zone. Last month Italy passed a tough austerity package, but the pressure remains.
With some 600 billion euros of bonds maturing over the next three years, Italy cannot afford to keep borrowing at current levels for long and the European Central Bank has been forced to keep buying Italian paper to try to limit the damage.
Monti has stuck to the goal imposed by Europe of a balanced budget by 2013 and has already passed a 33-billion-euro mix of tax hikes and pension and spending cuts to reduce the budget deficit over the coming two years.
But Italy's main problem remains weak growth and without action on this front, no progress will be made in bringing Italy's massive public debt down from its current level of 120 percent of gross domestic product.
Italy has been the euro zone's most sluggish performer over the past decade and faces a severe recession this year which Confindustria, the main business lobby expects will see the economy contract by 1.6 percent.
Monti has said he will open up sections of the economy to more competition and overhaul rigid job protection laws blamed for giving cast-iron guarantees to some workers while condemning others to years of dead-end casual contracts.
Unions have promised resistance but so far public protests have been limited and recent opinion polls suggest his approval ratings remain above 50 percent.
"Italians have accepted the very heavy measures that have been imposed on them with an almost British phlegm. They have shown an admirable sense of responsibility," he told Le Figaro.
(Additional reporting by Luke Baker in Brussels; Writing by James Mackenzie; Editing by Matthew Jones)
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