ITALIAN Prime Minister Mario Monti warned against a slide into populism as Silvio Berlusconi stepped up attacks on his technocrat government, accusing it of following failed ''Germano-centric'' policies.
Mr Berlusconi yesterday dismissed nerves in European financial markets, saying the main gauge of investor trust in Italy, the spread between Italian bonds and their safer German counterparts, was "a con".
Financial markets have pushed Italy's borrowing costs higher since Mr Monti said he would quit after Mr Berlusconi's party withdrew support for his administration.
Italy's financial crisis has threatened the stability of the eurozone and Mr Monti's EU allies want it to continue with fiscal discipline and reforms they believe helped the zone's third-biggest economy avoid a Greek-style collapse.
Mr Berlusconi, Mr Monti's flamboyant predecessor, who was driven from office last year by the crisis, says he will run for a fifth term to end the recession.
"The Monti government has followed the Germano-centric policies which Europe has tried to impose on other states and it has created a crisis situation much worse than where we were when we were in government," he said in an interview on his own Canale 5 TV network.
He accused Germany of deliberately profiting from the crisis which brought down his government last year to reap speculative profits and lower its own borrowing costs.
Mr Monti, an economics professor drafted in to head an unelected government, plans to resign once next year's budget is passed.
The former EU commissioner has said he is concentrating on his remaining time in government and not thinking about whether to stand as a candidate in the election expected in February.
Speaking on state television, he warned against "oversimplified" election promises that hid the true problems facing Italy.