MILAN: The European Central Bank sent Italy a confidential letter at the beginning of August calling for urgent measures to reassure skittish markets, according to the Corriere della Sera on Thursday.
Italy's best-selling newspaper published the letter, which is dated August 5, written by the head of the ECB Jean-Claude Trichet, and the governor of the Bank of Italy, Mario Draghi -- who will take over from Trichet on November 1.
The economic leaders called for "pressing action", "essential to restore the confidence of investors" as markets panicked over fears that Italy could be the next country to succumb to the eurozone debt crisis.
Trichet and Draghi stressed in particular the importance of Italy balancing its budget by 2013 -- a year earlier than the target laid out in an austerity plan adopted in July.
The ECB also called on Rome to "intervene further in the pension system," notably by aligning the retirement age of women in the private sector with the public sector, strengthening turnover rules and reducing wages "if necessary."
The letter also underlined "a need for significant measures to enhance potential growth," by increasing competition and fully liberalising local public services and professional services.
The ECB refused to comment on the publication of the letter.
Most of the recommendations were immediately put into place by Prime Minister Silvio Berlusconi's government, which announced its decision to bring forward the balancing of the budget to 2013 as part of a new austerity package, which was adopted by parliament on September 14.
Three days later, the ECB bought up Italian bonds in order to calm market tensions.
Trichet had insisted since the start of September that there had been "no negotiation" between the ECB and Italy on buying up bonds in exchange for certain measures being included in the new austerity package.
The news that the letter existed caused a polemic in Italy, with the opposition accusing Berlusconi of having placed the country under trusteeship.
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