On a visit to Tokyo, President Mario Monti announced that because the eurozone’s two largest players –Germany and France – had not abided by fiscal rules, they had set a bad example for the rest of the continent.

“The story goes back to 2003 (and) the still almost infant life of the euro, when Germany and France that were too flexible concerning public deficits and debts,” Monti said.

“Of course if the father and mother of the eurozone are violating the rules, you could not expect (countries such as) Greece to be compliant,” he added.

The technocrat, who replaced billionaire media magnate Silvio Berlusconi in November as head of the EU’s third largest economy, said that flouting rules that allowed for an annual budget deficit of no more than three percent of GDP was the issue.

He said despite recommendations from a meeting of ministers from European Union governments, France and Germany had escaped without punishment for going beyond the deficit limit.

The eurozone is now under pressure to increase its debt rescue fund, as the Organisation for Economic Co-operation and Development (OECD) announced on Tuesday that a financial safety net of at least €1.0 trillion was needed.

Eurozone finance ministers are meeting on Friday and Saturday in Copenhagen to decide whether to increase the EU safety net or not.

The OECD said the refinancing needs of vulnerable eurozone nations could top €1.0 trillion over the coming two years, on top of cash needed to recapitalise banks.

Italy alone needs some €750 billion to finance its debt, while Spain requires around €370 billion over the next three years.

AFP/jcw