Italy's public deficit will be 2% of GDP this year, Prime Minister Mario Monti has said, considerably worse than the previous estimate of 1.3%.

"Italy will have a deficit of around 2% this year," Monti said following talks with German Chancellor Angela Merkel.

The deficit was 3.9% in 2011 and Italy aims to cut it to 0.5% next year.

Earlier he said that eurobonds must be accompanied by increased buget EU level budget control.

"We need a partial mutualisation of debt, but also more central control of national budgets," Monti told the daily Frankfurter Allgemeine Zeitung.

"Without proper control it would be irresponsible to burden others with a share of your own debt," he said. "Germany and Italy take the same line on this and are prepared to surrender national sovereignty," he added.

German Chancellor Angela Merkel met Monti in Rome following perceived tensions between the two leaders at last week's EU summit.

But Monti played down any differences. "For several months now, the German and the Italian governments have both been working at a number of European summits to steer the EU onto the path of growth while still adhering to budgetary discipline," Monti said.

He insisted that Italy "isn't calling for a rescue and isn't calling for eurobonds. Italy is doing everything that is being demanded of it to boost growth."

Monti conceded that his government would not be able to solve the deep structural problems facing Italy in the the year and four months his government had left in office. "It's also a question of the economy. If a government such as ours implements the big fiscal adjustments, that will be a burden to the economy in the short term," he said.