* Italy has done what is needed to save itself -industry
* Govt always worried about avoiding "abyss" -cooperation
* Govt less worried than it was when Monti took over
(Adds quotes from Passera, cooperation minister, background)
MILAN, June 11 (Reuters) - Measures adopted by Italy so far
have put the euro zone's third-largest economy on a sound
footing to face the current financial turmoil, the country's
industry minister said on Monday, dismissing the idea Rome may
need external help.
"Italy has done what was necessary to save itself in past
months," Industry Minister Corrado Passera said when asked if
Spain's aid deal meant that a bailout for Italy was likely.
Speaking on the margins of a conference in Milan, Passera
told reporters that austerity measures adopted so far have put
Italy "among the countries better placed to deal with the
financial turmoil Europe finds itself in."
After the weekend deal in which euro zone leaders agreed to
lend Spain up to 100 billion euros to recapitalise its
debt-laden banks, many analysts believe Italy may be the next
country to seek assistance.
A European market rally early on Monday fizzled out quickly.
Italian benchmark bond yields rose above 6 percent at one point,
less than half a point below Spain's levels. The spread compared
with safer German Bunds rose to around 4.6 points, compared with
a recent low of 2.8 points in March.
Andrea Riccardi, minister for International Cooperation,
sounded slightly less upbeat than Passera when asked if the
government was more worried about the crisis spreading to Italy
following the bailout for Spain's banks.
"This government has always been worried, our commitment has
always been accompanied by our concern to avoid the abyss," he
told Reuters. "Today we are watching what is happening in Spain
very closely, but we are much less worried than we were in
November" when Prime Minister Mario Monti took office.
Monti formed a government of technocrats when a discredited
Silvio Berlusconi stepped down in November as Italy seemed
headed toward a Greek-style default on its massive debt.
To shore up investor confidence, Monti immediately passed a
tough austerity package, including new taxes and pension cuts,
which is now weighing on his popularity.
Italy is facing headwinds both from the broader euro zone
debt crisis and the growing domestic difficulties for Monti, who
admitted last week that he had lost the support of important
parts of the country's establishment.
He was referring in particular to a front page editorial in
Italy's most influential daily, Corriere della Sera, in which
two prominent economists, Francesco Giavazzi and Alberto
Alesina, said Monti's early reform drive had petered out and its
policies now seemed very similar to its predecessors'.
The economy is mired in a deep recession which shows no
sign of easing and parts of the ruling majority are openly
discussing whether it would be better to pull support from Monti
and hold an early election before the end of this year.
"We must all save ourselves together (because) no-one can
save themselves alone," Passera said in support of the deal for
"The cost of not saving Europe and allowing the euro to
disintegrate, which can absolutely be avoided, would be higher
than the cost of helping the countries in difficulty to make the
(Reporting by Elvira Pollina and Steve Scherer, writing by
Gavin Jones. Editing by Jeremy Gaunt.)
© 2022 Thomson/Reuters. All rights reserved.