Italy's New PM Pushes For European Banking Union

By ELAINE GANLEY

PARIS (AP) â¿¿ Italy's new premier pressed on Wednesday for the creation of a full-fledged European banking union and said he wants results before the EU summit next month.

Enrico Letta said at a news conference Wednesday with French President Francois Hollande that "we mustn't waste time on this."

"We have decided it. We have to do it," he said, adding it's a way to create jobs by helping companies get lower interest rates.

Letta was in Paris a day after taking office. He visited Germany on Tuesday and heads to Brussels on Thursday.

Hollande suggested he backed an aggressive push on the banking union, seen as a cornerstone to end the eurozone's three-year-old crisis. But Germany, Europe's biggest economy, fears it might mean new costs to bail out ailing banks in other European nations.

"If we want to bring liquidity to our businesses, if we want the European Central Bank to be able to intervene under good conditions, we must achieve the banking union according to the foreseen calendar," Hollande said.

Letta rejected the notion of a two-speed Europe in which a handful of countries decide and set the pace, saying he believes solutions that will be good for Italy's troubled economy will be good for Europe as a whole.

"I don't share the idea of those who think that solutions that are good to jumpstart growth in a country like Italy is something bad for Germany," he said. He said he was "absolutely committed" to ensuring that "very clear, very precise" measures to help growth be put in place at the summit.

"We can't have a Europe in which the rest of the continent falls apart and two countries or three countries do well," Letta said.

Italy, the No. 3 economy in the 17-nation eurozone, is currently in recession after years of little growth. Its unemployment rate is 11.5 percent and its debt burden amounts to more than 120 percent of the country's annual economic output â¿¿ trailing only Greece.

Letta said Italy will respect its commitments to Europe, but he reflected a growing antagonism within Europe, passing on what he said was the most important message from Italy's experience: "We need a Europe that helps people and doesn't frustrate people."

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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