MILAN (Reuters) - Italian Prime Minister Mario Monti is confident reforms undertaken by his country over the last few months will help soften any blow from an unruly default by euro zone partner Greece.
In an interview with U.S. television network PBS on Tuesday Monti said he hoped Greece -- struggling to reach agreement on a new bailout package -- would not default.
"(But) I'm confident that we would be much less exposed to a Greek default risk than we would have been a few months ago," he said, according to a transcript of the interview on the PBS website.
Monti said Italy was now widely seen as a country "which, since a few months, has really taken some tough structural measures, both as regards the budgetary consolidation and as regards structural reforms for growth."
Greek parties will try yet again on Wednesday to strike a reform deal in return for a new international rescue to avoid a chaotic default and potential spill over into the euro zone as a whole.
This comes after a string of delays that have prompted some EU leaders to warn that the euro zone can live without Athens.
A respected economist, Monti took power in Italy in November after an escalating euro zone debt crisis pushed Italian yields to euro lifetime records of around 8 percent and precipitated the resignation of discredited Prime Minister Silvio Berlusconi.
Monti introduced further austerity measures, including a radical reform of the country's generous pension system. He is now attempting to make Italy's tight labor market more flexible, after pushing through some modest liberalization measures.
"After the recent financial crisis, markets woke up quite brutally and did exercise a lot of pressure for each of us to engage in a serious budgetary consolidation," Monti said.
"Now the role of the markets is there, but I don't think we have to rely basically and mainly on high interest rates for governments to continue the path of sound budgetary and reform policies," he said.
Italian government bond yields have come down significantly from the November peaks, helped by an unprecedented low-interest rate three-year loan liquidity injection by the European Central Bank. The benchmark 10-year yield stood at 5.6 percent on Wednesday.
The Bank of Italy says Italian yields would need to stabilize at around 5 percent to make the country's 1.9 trillion euro debt pile sustainable over time.
Reporting by Valentina Za. Editing by Jeremy Gaunt.