Italy must comply with rules or face higher debt costs: ECB’s Knot

FRANKFURT (Reuters) – Italy needs to comply with fiscal rules or face higher borrowing costs as the European Central Bank will not rush to the aid of any single euro zone member, ECB policymaker Klaas Knot said on television on Wednesday.

“It’s quite pertinent that Italy actually complies with the rules,” Knot, a hawk on the ECB’s Governing Council, told CNBC. “If it doesn’t, the result is that spread will go up.”

Knot said that any contagion from rising Italian yields has so far been limited and thus requires no action from the ECB.

“We’re not seeing an overall deterioration in credit conditions, we’re not seeing an overall deterioration in financial conditions,” he said. “Those would have to be the kind of things that we would first have to see before could contemplate changing our course of action.”

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