Italian PM says euro crisis nearing end, has raised tensions

(MUNICH) - Italian Prime Minister Mario Monti said on Saturday the eurozone crisis had reopened old European wounds and tensions, although he saw a light at the end of the tunnel of the financial turmoil.

Speaking at the Munich Security Conference here, Monti said the eurozone was "not in the midst, but, I believe, towards the solution" of the crisis, but stressed that any answer must be what he termed "harmonious".

"In retrospect, we have seen in the last few years, that the crowning of European integration -- the euro -- has indeed, because of the euro crisis, brought back into the European picture misconceptions and prejudices," he said.

The crisis has set northern countries against southern and big nations against small and the tensions are "extremely dangerous -- much more in the longer-term perspective than the eurozone crisis itself".

"We certainly do not need in Europe to have phantoms of the past to be coming up again," said the premier.

Nevertheless, he took a swipe at Germany and France for their part in watering down the EU's fiscal pact in 2003 when they themselves were breaking the rules.

"Larger continental countries should not forget, for example Germany and France, that they were the ones putting in question the very credibility of the Stability and Growth Pact in 2003.

"We have spent nine years since then trying to gradually build up again a credible enforcement mechanism," said Monti, whose debt-laden country has been under pressure to reform to fend off the eurozone debt crisis.