Aug. 6 - Italy is back under the euro zone spotlight after the government calls for a confidence vote to speed up spending cuts. Sonia Legg reports.
The euro zone debt crisis roulette wheel stopped briefly on Italy on Monday. The country's Prime Minister called for a confidence vote in parliament to speed up the passage of more than 4 billion euros in spending cuts. The announcement followed comments at the weekend from the governor of Italy's central bank. Ignazio Visco insisted the country didn't need euro zone rescue funds to buy its government bonds. But investors aren't entirely convinced by reassurances from Italy or Spain at the moment. Robert Halver is a trader in Frankfurt. (SOUNDBITE) (German) ROBERT HALVER, TRADER IN FRANKFURT, SAYING: "Mr Monti has to be careful. One cannot just switch off democracy so the parliaments have no say in the matter any more, in order to change the euro zone into a bureaucratic monster. The problem of the euro zone is not that the parliaments interfere but that many countries like Italy did not do their homework." Last week the ECB set out plans to buy bonds of heavily indebted countries to ease government funding pressures. But Germany hasn't yet approved Europe's new rescue fund. Spain's borrowing costs also remain dangerously high and Greece is yet to secure bailout funds. That - says Christian Schulz from Berenberg Bank - leaves many unanswered questions. (SOUNDBITE) (English) CHRISTIAN SCHULZ , BERENBERG BANK, SAYING: "The ECB has clearly said they will help countries that reform themselves, if there is a rescue package, so there is political approval for ECB aid in a way. So now we are looking at two things, one is will Spain and Italy actually request help and under what conditions? The other question is will the Germans and their allies actually approve such a package? Spain is sitting firmly on the fence - saying it may seek a full aid package - but hasn't yet made a decision. Tom Vosa from National Australia Bank says the longer they can delay the better. (SOUNDBITE) (English) TOM VOSA, HEAD OF MARKET ECONOMICS, NATIONAL AUSTRALIA BANK, SAYING: "It's possible that Spain and Italy will not require a bailout and certainly in terms of structural reform we have had governments that have been getting on with it fairly quickly so if they do get a bailout I think the conditions will be far less strict than it has been on Greece and even on Ireland." Talking of Greece - the so-called Troika inspectors left Athens on Sunday. They're due to return in September to give their final verdict on the state of country's finances. That's when the summer break from the euro zone debt crisis could be well and truly over. Sonia Legg, Reuters