The rapid approval of a eurozone budget discipline pact will soften German and European Central Bank positions on the single currency's debt crisis, dpa quoted Italian Prime Minister Mario Monti as saying Tuesday. The so-called fiscal compact, which EU leaders are expected to agree on January 30, is due to force signatories to keep to a balanced budget and introduce European Court of Justice fines for countries which fail to stick to the rule. "My feeling is that the vision, the judgement and the positions of all the actors concerned may change as soon as there is a political deal - expected very soon - and then a quick ratification and entry into force of the fiscal compact," Monti said. Monti, who is also economy minister, spoke after talks with EU counterparts in Brussels. He was replying to a question on Germany's reluctance to expand the new eurozone bailout fund, the 500-billion-euro (650-billion-dollar) European Stability Mechanism (ESM). "The same considerations, to a large extent, are applicable to the (European) Central Bank," Monti said. "I think we could also witness an evolution there," he added. The Frankfurt-based body has so far spurned calls to step up its bond buying programmes so as to act as a lender of last resort to troubled eurozone members like Italy and Spain. Monti stressed that the ECB had already stepped back from a strict non-interventionist policy by providing large-scale liquidity to private banks, thus helping to mitigate the risk of a credit crunch. The Italian prime minister dismissed as "hearsay" German press reports indicating that he was pushing for a doubling of ESM funds to 1 trillion euros. "I never mentioned figures so I don't have to confirm or deny" them, he said. But he nevertheless called for a credible expansion of the euro area rescue mechanism. "If the sums are big enough that markets consider them credible, it is very likely that they will never have to be dished out," he said.
