German Chancellor Angela Merkel told Italians they could not expect to reap the rewards of economic reforms in just a few months but that the experience of her own country showed it was worth persevering.

Speaking in Rome with Italian Prime Minister Mario Monti, she said Germany had gone through unpopular reforms in order to bring down unemployment and turn around the economy.

Italians are reeling from tax hikes, stagnant wages and rising unemployment and the economy is stuck in a year-long recession which shows no sign of easing.

However the Chancellor urged Mr Monti not to be deflected by domestic criticism of his measures.

Mr Monti, who pushed a contested labour market reform through parliament last month, now faces union resistance to a plan to cut public spending which he has promised to formally unveil later this week.

He said the government's goal was to "cut waste and improve efficiency", and rejected a reporter's suggestion that the cuts would be a fresh blow to jobs and the economy.

Mr Monti and Dr Merkel, who have met three times over the past two weeks, avoided going into the substance of the deal at last week's European Union summit which will allow EU bailout funds to recapitalise banks and try to stabilise sovereign debt markets.

Mr Monti defended his labour market reform which he admitted "hasn't had a very good press" in Italy, but which he said was well received by "sophisticated" observers abroad, including the European Commission and International Monetary Fund.

He said the reform, which eases restrictions on firing staff, makes temporary contracts more expensive for companies and broadens jobless benefits, had been attacked by unions because they tended to resist change, and by employers because they wanted to inflict a crushing defeat on unions.

The Italian and German labour ministers will work closely to exchange views on best practices to guide future policy decisions, Mr Monti said.