Italy denies agreeing to IMF monitoring

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Italy denied agreeing to strict IMF monitoring of its budget spending, but added that it is ready to seek "advice" from the Washington-based institution, a government source told AFP on Friday.

European officials had said that the International Monetary Fund and the European Commission will strictly monitor Italy to reassure markets that Rome is meeting its targets to reduce its budget deficit.

But an Italian government source denied that such an agreement had been made with the IMF and EU, and said instead that Rome would seek "advice" from the IMF on the issue.

The institution's advice is expected to play a complementary role to the European Commission's monitoring, added the source.

Investors forced up the Italian government's 10-year borrowing cost to a euro-era record 6.402 percent on Thursday.

At the G20 summit on Thursday, Prime Minister Silvio Berlusconi vowed to stick to Italy's target of balancing the budget by 2013 and that new austerity measures would be fully enacted by the end of the month.

© 2011 AFP

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