Silvio Berlusconi blames Germany for Italy’s financial problems

Financial markets have pushed Italy’s borrowing costs higher since Mr Monti said he would quit after Mr Berlusconi’s party withdrew support for his administration.

Italy’s financial crisis has threatened the stability of the eurozone and Mr Monti’s European allies want the country to continue with fiscal discipline and reforms they believe helped the zone’s third-biggest economy avoid a Greek-style collapse.

Mr Berlusconi, Mr Monti’s flamboyant predecessor, says he will run for a fifth term next year to end the recession.

Yesterday, he dismissed nerves in financial markets, saying the main gauge of investor trust in Italy, the spread between Italian bonds and their safer German counterparts, was “a con”.

“The Monti government has followed the Germano-centric policies which Europe has tried to impose on other states and it has created a crisis situation much worse than where we were when we were in government,” Mr Berlusconi said in an interview on his own Canale 5 television network.

He accused Germany, the eurozone’s biggest economy, of deliberately profiting from the crisis – which brought down his government last year – reaping speculative profits and lowering its own borrowing costs.

Mr Monti, an economics professor drafted in to head an unelected government, plans to resign once next year’s budget is passed in parliament.

Speaking on state television, he defended his government’s economic record and warned against “oversimplified” election promises that hid the true problems facing Italy.

He said: “It’s important that there is this self-discipline on everyone’s part so as not to create ruptures with Europe and above all not to treat people like fools but like mature citizens.”

He left his own political plans open, refusing to confirm speculation that he could join a centrist grouping or lend his name to a pro-European reform party.

There has also been speculation that Mr Monti could become Italy’s next president, an office which would allow him to play a crucial role in influencing the overall political debate.

Opinion polls give Mr Berlusconi’s squabbling centre-right People of Freedom (PDL) party little chance of winning the vote, with centre-left leader Pier Luigi Bersani currently seen as Mr Monti’s most likely successor.

German Chancellor Angela Merkel said she supported Mr Monti’s reform path and was confident it would continue.

“I am sure the Italian people will vote in such a way that Italy stays on the right path,” she told reporters in Berlin.