Italian prime minister Mario Monti has toned down an apparent criticism of Greece as a country of “corruption, nepotism and tax evasion”.
Speaking after he addressed European Parliament in Strasbourg today, Mr Monti said he said he had used the words to describe “the history of political practices in Greece”.
He said over years poor financial policies including a lack of open and fair competition had led Greece to be dependent on successive bailouts.
“Perhaps the austerity measures are excessive, but they may be seen as compensation for policies in the past” he said.
At a press conference after his speech Mr Monti stressed his remarks were made in a historical context “not today”. But he added: “Nobody said Greece was a catalogue of best practice”.
Mr Monti told journalists Germans might be disappointed that there was "not more structural reform in Greece". But he added Germany should be proud that the financial discipline and regulation for which it was famous had now spread across the EU. "It is a virtue not a vice that constraint has gradually been forced on all member states," he said.
European Parliament president Martin Schulz said the measures being put in place for Greece were “not just austerity”. He said there was a need to generate employment. “Greece needs a kick start more because it has already got austerity” he said.
Mr Schulz said he had been invited to address the Greek Parliament on February 28th and would use the occasion to show European solidarity with the Greek people.
Addressing the European Parliament earlier, Mr Monti said although southern, so-called peripheral countries were widely blamed for the debt crisis, France and Germany also carried major responsibility for watering down the bloc's fiscal rules.
"The euro zone crisis has given rise to too many resentments and re-created too many stereotypes, it has divided Europe into central countries and peripheral ones; all these categories must be decisively rejected," he said.
Mr Monti said France and Germany originated the crisis of the euro zone's Stability Pact in 2003 when, with the support of Italy, they effectively dismantled the rules to forgive their own lack of fiscal discipline.
"There are no goodies and baddies in the European Union" he said, rejecting the popular division of the euro zone into virtuous northern countries and profligate southern ones such as Greece, which is battling to stave off a default.
"We all have to feel commonly responsible both for what has been done in the past and above all in the construction of the future," he said.
Frequently interrupted by applause, Mr Monti said although Europe was right to strengthen fiscal discipline, this should be accompanied by a greater emphasis on measures to help growth and improve the workings of the single European market.
Additional reporting: Reuters