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Italy needs to be ready for 'all eventualities' on euro - Savona

Reuters  |  ROME 

(Reuters) - European said on Tuesday that had to be ready for "all eventualities" regarding its membership of the zone, which might depend on factors outside its control.

Italy's anti-establishment League/coalition had nominated to be its first last month, but vetoed the appointment because of Savona's scepticism about zone membership.

The academic who was eventually named economy minister, Giovanni Tria, has committed to keeping the

"We may find ourselves in a position where it's not we who decide but others," told a panel of senators. "My position regarding a Plan B ... is that we have to be ready for all eventualities."

Italian bond yields initially rose after Savona's remarks and Milan's blue-chip share index erased earlier gains, but then yields returned to their previous levels and stocks partially recovered.

"He is a well-known eurosceptic and he seems to be being deliberately provocative," said Chris Scicluna, at in

"To the extent that we knew his views already, the latest comments provide a reminder that there are people in the government with these views and that the is on a path of confrontation with the European Union," he added.

The governing coalition of the and the right-wing League plans sweeping tax cuts and higher welfare spending, which is likely to lead the government to renegotiate its budget deficit targets with

warned the government on Tuesday to be cautious with public finances to avoid upsetting financial markets and increasing public debt, which is the highest in the euro zone after Greece's.

Savona, an 81-year-old former university professor, wrote in a book published this year that Italy's entry into the euro zone was a "historic mistake". He has a distinguished academic record and also once worked at the

Savona told the senators he would meet with "as soon as this encounter is over," but he later told reporters the meeting would not be on Tuesday, as they had assumed.

He said he intended to meet Draghi but the appointment had not yet been arranged.

(Reporting by Angelo Amante, additional reporting by in London, Writing by and Steve Scherer; Editing by Kevin Liffey)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, July 10 2018. 20:22 IST