Sicily in danger of default, says Italian PM

Italian prime minister Mario Monti Mario Monti said he wanted confirmation that the governor of Sicily would resign

Italian PM Mario Monti says the region of Sicily is close to defaulting on its debts, and he is seeking confirmation that the governor will resign.

In a statement, Mr Monti said there were "grave concerns" that the island would default following a growing financial crisis.

He said he had written to Raffaele Lombardo asking him to confirm his stated intention to quit this month.

Mr Monti's government is struggling to cope with a huge national debt crisis.

"The solutions which could be considered, that involve action on the part of the government, cannot fail to take account of the situation of the administration at regional level," his statement said.

Sicily, which has a special autonomous status, has debts of about 5bn euros (£3.9bn) and faces annual interest payments of between 500m and 600m euros, Reuters reported.

Mr Monti - an economist - took over as head of a government of technocrats last year after his predecessor Silvio Berlusconi resigned amid a mounting national debt crisis.

Italy's public debt is equal to about 120% of its gross domestic product (GDP) and the economy is in its fourth recession of the past 10 years.

Earlier this month, the government agreed spending cuts of 26bn euros (£21bn, $32bn) over three years to tackle the deficit.

Rome is struggling to keep the faith of investors who are increasingly asking for higher rates of return for lending to the country.

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