Monti, German Chancellor Angela Merkel, Spanish Prime Minister Mariano Rajoy and French President Francois Hollande met in the Italian capital to hammer out proposals to take to next week's key European Union summit on the eurozone crisis in Brussels.
Hollande said the leaders had agreed that the European Union should set aside the equivalent of 1% of its GDP to boost growth in the area. The French president said the plan to earmark "around 120-130 billion euros" to be used "as soon as possible" would be put to next week's summit.
Monti said austerity policies were "not sustainable" without growth to accompany them, adding that European leaders were called on to show the markets that the euro project was "irreversible". Hollande added that he will ask the upcoming summit to proceed towards a Tobin Tax on international financial transactions even in the face of British objections. He said the EU countries in favour of the tax - named after Economics Nobel prize winner James Tobin - should move ahead alone using the mechanism of "reinforced cooperation".
Merkel reiterated her position that there must be greater political integration to protect the single currency and that states must be willing to concede sovereignty in some areas.
"We're doing what's possible to keep the euro as our currency and we want to fight for this," Merkel, who was poised to fly to Gdansk for Germany's Euro 2012 quarter-final against Greece, told reporters.
"The political union must be stronger," she said. "We need more Europe".
Merkel also said that Europe could not afford to ignore the importance of stability agreements for the euro as it had in the past. "Where there is solidarity, there must also be control," she said. "Europe has had a stability pact but then it didn't respect it". In 2003 both Germany and France surpassed the deficit ceiling of 3% of GDP established in the euro Stability and Growth Pact of 1997, but the council of ministers failed to apply sanctions. Ten states, led by Greece, broke the rules the following year. "Growth and solid finances are two sides of the same coin," Merkel said. Monti said next week's summit must produce "more credible decisions about growth, moves capable of forming a clear path over the mid and long term towards economic, financial, monetary and banking integration, and decisions that will satisfy the expectations of the financial markets". Rajoy said the leaders had "bet on the future of Europe" after agreeing to move towards a political, economic, banking and fiscal union.
Hollande also said that he "fully" backed Monti's plan to use European Union rescue funds to buy bonds on the secondary market and stem the widening of bond-yield spreads that makes it harder for indebted countries to service their debts. Hollande said there had been "a very useful exchange of views" on the so-called 'anti-spread plan' at Friday's four-way meeting, although he declined to say what Merkel's view of the idea was.
Germany has so far been skeptical about using rescue funds to mutualise debt.
The French leader returned to the question of eurobonds too.
He said commonly issued eurobonds to cover sovereign debt across the eurozone must remain "a prospect" to address future crises despite current German opposition. "Eurobonds must remain a prospect and not one 10 years off," Hollande said, adding that eurozone members should cede more sovereignty "only if there is more solidarity in Europe". The spread between Italian and German 10-year bond yields fell 10 points to 410 and the yield dropped 0.15% to 5.69% shortly after Friday's meeting. Analysts said the markets appeared to have welcomed the amount of agreement found on the need to revive growth and move to a tighter political and fiscal union.(ANSAmed).