Italian Prime Minister Mario Monti and German Chancellor Angela Merkel on Wednesday spoke of "excellent" relations between their two countries, despite reports of a rift between the two at a European Union summit last week.
"Our two countries can together relaunch Europe," Monti said during a joint news conference at Villa Madama, an aristocratic Renaissance residence situated on a hill in the Italian capital, dpa reported.
The Italian premier said he had told Merkel that his government remains "determined to continue along the path of containing budget (deficit), fiscal discipline and structural reforms with a view (of achieving) growth that will hopefully come as soon as possible."
Monti cited as an example labour reforms - some of which make it easier for employers to hire and fire workers, but also introduce more unemployment benefits - passed by Italy's parliament last week.
He also said that the government would soon introduce spending cuts to the public sector, which together with higher taxes introduced earlier this year aim to reduce Italy's public debt and meet government deficit-reducting targets.
Merkel for her part praised attempts made by Monti's government to curb state expenditure and relaunch Italy's recession-hit economy. "The structural reforms introduced by the Monti government are excellent," she said.
"It is in our interest that all the European countries can experience positive economic development, otherwise Germany cannot maintain its prosperity," Merkel added.
Both leaders appeared keen to smooth any rifts that may have emerged during Thursday and Friday's EU summit when Italy, Spain and France succeeded in winning concessions from Merkel, who agreed to allow European bailout funds to channel money directly to troubled banks.
The decisions taken at the summit "were unanimous decisions, including those on improving mechanisms to achieve stability in the short term," Monti said.
"At the EU summit we found solutions that are satisfactory for everyone," Merkel said.
Monti reiterated that his government would not seek a bailout from the European Union to finance Italy's debt.
"Italy's budget deficit in 2012 will be 2 per cent of GDP (gross domestic product) - half of the European average, and next year it will have a surplus in structural terms," the Italian premier said.
Monti also said the Italian and German government shared a common vision aimed at increasing political and economic integration in Europe.
"I believe our two countries are among those most willing to move towards a shared sovereignty" aimed at increasing Europe's economic competitiveness, Monti said.
After the news conference, the two leaders continued their talks in a plenary session that included several ministers - Merkel was accompanied by five members of her cabinet, including Foreign Minister Guido Westerwelle and Finance Minister Wolfgang Schaeuble - from their respective governments.
The talks were to focus on bilateral relations. Germany is Italy's biggest trade partner, with the volume of exchange between the two countries topping 100 billion euros (126 billion dollars), according to Monti.