Italy's Monti rules out new EU crisis meet

Italian Prime Minister Mario Monti on Monday ruled out holding another emergency EU summit on the eurozone crisis despite a new wave of market fears about Spain's ability to contain its debt. Monti added that he favoured injecting additional European Central Bank funds to help prop up Europe's financial sector in the face of new scepticism about even the larger EU economies' ability to hold up in the coming months. But the technocratic new Italian cabinet leader said that mechanisms created in previous summits were sufficient -- comments aimed in part at improving market sentiment that has deteriorated sharply since the end of last week. "I do not think it would be appropriate to have an emergency summit or a European-level meeting," the Interfax news agency quoted Monti as saying after talks with Russian President Vladimir Putin in the Black Sea resort of Sochi. "You ask me whether it would be appropriate and useful to allocate new European Central Bank Funds -- yes! Of course it would be useful," said Monti. "But I do not think there are grounds for that yet -- grounds for requiring the immediate allocation of funds. Monti added that some of the new market pressures were coming from a poor understanding of agreements reached during a June 28-29 meeting that ended with a broad agreement on a 500-billion-euro ($605-billion) bank bailout fund. "We are hearing numerous comments about (the June deal) that only destabilise the situation -- that improperly interpret both the package and those decisions," he said without going into further details. Monti spoke only moments after Italy halted the short-selling of financial stocks for a week while Spain banned all such trades for three months in response to sharp European market drops over the past two trading days. Much of the latest fears have focused on Spain and its possible need to formally turn to international lenders for help. But Monti said he preferred using existing financial mechanisms to force EU governments such as Spain to follow tight fiscal policies that could help tackle their sovereign debt and budget crises. "We must use the firmest policies possible to overcome all the difficulties," Monti was quoted as saying. Putin for his part said he intended to help the eurozone -- a key client of Russian energy and largest single trade parner -- by keeping the share of the state's foreign reserves held in euros at the existing 40 percent. "We are not reducing this level," Putin was quoted as saying. "We are not changing a thing. We trust the fundamental capabilities of the European economy and will do everything to support our European partners' efforts to stabilise the situation," the Russian leader said.