7 killed after flooding ravages northern Italy

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A man walks on mud and debris between broken cars in a street of Monterosso after overnight floods on October 26.NEW: The death toll rises to seven and a state of emergency is declared348 Italian military personnel are dispatched to help in flood-ravaged areasCinque Terre town is "isolated, accessible only by sea," its mayor saysThe storms have caused transportation problems across Liguria

Rome (CNN) -- Seven people have died and seven others are missing after rains triggered severe flooding in northern Italy, civil protection officials said Friday.

Especially hard hit was the tourist-popular Cinque Terre region on Italy's northwest coast.

The Italian Council of Ministers declared a state of emergency in the flood region, which means 65 million euros ($91 million) will be put aside to deal with the disaster, the Corriere della Sera newspaper reported.

A special cabinet meeting was called Friday to discuss the situation, the Italian government said.

Heavy rains continued to fall Thursday night in Milan and other spots across the southern European nation, according to the Servizio Meteorologico, Italy's official weather agency. The agency gave an alert about intense, widespread rainfall -- potentially with strong wind gusts and hail -- in the regions of Calabria and Basilicata in southern Italy, as well as the eastern part of Sicily.

Meanwhile, Monterosso al Mare -- between Genoa and Pisa in the Cinque Terre region of Liguria -- has been "isolated, accessible only by sea" because of earlier rains and floods, Mayor Angelo Betta told the news agency ANSA.

So, too, is the nearby town of Vernazza, with even bulldozers and cranes still not able to reach it.

That said, Betta reported some progress Thursday thanks to round-the-clock efforts by emergency workers and volunteers to clean up the town. One volunteer in that community died in the flood Wednesday.

"The situation is much better compared to yesterday," Betta said.

Italy's Defense Ministry noted Thursday on its website that 348 military personnel have deployed to the provinces of Massa Carrara and La Spezia to assist in the wake of flooding here.

Three people were killed after a house collapsed in La Spezia, an ANSA report said.

ANSA also reported that prosecutors have opened a manslaughter investigation related to the deaths of two people from flood-related injuries in Aulla. Authorities are assessing whether their deaths had anything to do with faulty work that may have caused the Magra River to overflow.

The weather has also caused major travel headaches throughout the region. A mudslide that trapped a truck driver, who was eventually freed, has caused the A12 highway in Liguria to be blocked since Tuesday. Train services in Liguria have been halted, too, due to mud and debris on the tracks.

CNN's Hada Messia and Marilia Brochetto contributed to this report.

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Pressure on Italy in eurozone struggle

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By Quentin Peel, Peter Spiegel and Hugh Carnegy, FT.comOctober 24, 2011 -- Updated 0245 GMT (1045 HKT)Italian Prime Minister Silvio Berlusconi waves as he arrives prior to a European Council on October 23, 2011. Germany and France are pressuring Italy to boost growth and reduce its huge debtConfidence in Italy's public finances is critical to relieving the debt crisisFrance and Germany are worried that Berlusconi is not taking tough enough measures

(Financial Times) -- Germany and France have turned on Italy to demand further action to boost growth and reduce its huge debt, as leaders of the eurozone struggled to agree on how to boost their rescue fund to stop contagion in the sovereign debt markets before a Wednesday deadline.

Angela Merkel, the German chancellor, and Nicolas Sarkozy, French president, held tough talks with Silvio Berlusconi, at the start of the day-long summit in Brussels, insisting that he take more radical measures to restore the trust of investors.

Confidence in Italy's public finances is critical to preventing the spread of the Greek debt crisis across the eurozone, but France and Germany are worried that Mr Berlusconi is not taking tough enough measures.

"Italy is a big and important partner," said Ms Merkel, saying further structural reforms were essential. "Everything must be done for it to live up to its responsibilities."

The clash with Mr Berlusconi came as 27 European Union leaders negotiated the three pillars of a package aimed at stemming the crisis. They agreed on the need for European banks to find €108bn in new capital to persuade investors that they can withstand the pressures of the sovereign debt crisis.

On Sunday night, the 17 eurozone leaders debated without reaching a conclusion two potential models to expand the financial firepower of their €440bn European financial stability facility -- the eurozone rescue fund -- using financial engineering to leverage the core capital by up to five times.

One plan would set up a special fund to attract global investors, including potentially the IMF, that would buy Italian bonds and those of other troubled eurozone countries. The other, which could run in parallel, would guarantee against losses by bondholders. Ms Merkel and Mr Sarkozy warned that both plans involved technical complexity.

At the same time top-level officials were negotiating with a consortium of international banks to increase their contribution to a new rescue plan for Greece, to cut the country's debt burden. Without further cuts in repayments to bondholders, EU and IMF lenders will be saddled with €252bn in bail-out loans until the end of 2020, according to a confidential EU-IMF study. Negotiators said the two sides remained far apart on the size of any debt writedown.

The three elements of the package are supposed to be decided by twin EU and eurozone summits on Wednesday. Non-members of the eurozone, led by Britain, Poland and Sweden, insisted they come back to Brussels to sign off on the bank recapitalisation plan before the final eurozone summit.

Mr Sarkozy said there were "more long hours of discussion to come" before a final accord could be reached but expressed his absolute determination -- with Ms Merkel -- to produce "solid and durable" common proposals by Wednesday.

Yet Ms Merkel's and Mr Sarkozy's joint frustration with Mr Berlusconi was made dramatically clear at a joint press conference. Asked if the Italian prime minister had reassured them about his action to reduce his country's debt level, they looked at each other with wry smiles, casting their eyes to the ceiling.

"We are conscious of the responsibility of all the authorities in Italy," said Mr Sarkozy. Asked if she trusted Mr Berlusconi, Ms Merkel replied: "He is our interlocutor, and naturally we are relying on him."

© The Financial Times Limited 2011

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