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Euro zone debt crisis nearly over: Italy's PM

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Italian Prime Minister Mario Monti on Wednesday played down the risk that economic troubles in Spain would spread to the rest of Europe and said he believed the euro zone debt crisis was nearly over.

Only last weekend Monti expressed concern about the state of finances in Spain and warned it would not take much to reignite the euro zone debt crisis and revive the risk of it spreading to Italy.

In recent days, however, he struck more optimistic tones.

"Spain, I'm sure, is on a steady course of budgetary consolidation," Monti told reporters in Tokyo, where he arrived from a nuclear security summit in South Korea.

"And contagion as a whole, I hope, will soon belong to the past now that more discipline has been adhered to by most member states, and now that the firewalls are being in the process of being fortified," he said.

"You all know that the euro zone has gone through a crisis, a huge crisis. I believe this crisis is now almost over," Monti said in a speech earlier.

On Tuesday, Monti met his Spanish counterpart Mariano Rajoy on the sidelines of the nuclear summit in Seoul and after the meeting said he had "total confidence" in Madrid's economic management.

Monti, who replaced beleaguered Silvio Berlusconi in November, rapidly pushed through austerity measures, while Spain shocked markets last month when it said it had missed its 2011 budget deficit target and set itself a softer goal for 2012.

But now a key piece of his reform package - the labour reform considered crucial for economic revival - has run into opposition.

Monti, however, expressed hope that the reform would be passed, despite strong opposition from the union movement and resistance from the centre-left Democratic Party which supports his government in parliament.

"Of course my view is that it is a bold and balanced package," Monti said of the plan, which makes it easier for firms to fire employees and gives them financial incentives to hire permanent workers rather than temporary staff.

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