We present a detailed analysis of the XMM-Newton RGS high resolution X-ray spectra of the Seyfert 2 galaxy, Mrk573. This analysis is complemented by the study of the Chandra image, and its comparison to optical (HST) and radio (VLA) data. The soft X-ray emission is mainly due to gas photoionised by the central AGN, as indicated by the detection of radiative recombination continua from OVII and OVIII, as well as by the prominence of the OVII forbidden line. This result is confirmed by the best fit obtained with a self-consistent CLOUDY photoionisation model. However, a collisionally excited component is also required, in order to reproduce the FeXVII lines, accounting for about 1/3 of the total luminosity in the 15-26 A band. Once adopted the same model in the Chandra ACIS data, another photoionised component, with higher ionisation parameter, is needed to take into account emission from higher Z metals. The broadband ACIS spectrum also confirms the Compton-thick nature of the source. The imaging analysis shows the close morphological correspondence between the soft X-ray and the [OIII] emission. The radio emission appears much more compact, although clearly aligned with the narrow line region. The collisional phase of the soft X-ray emission may be due to starburst, requiring a star formation rate of $simeq5-9$ M$_odot$ yr$^{-1}$, but there is no clear evidence of this kind of activity from other wavelengths. On the other hand, it may be related to the radio ejecta, responsible for the heating of the plasma interacting with the outflow, but the estimated pressure of the hot gas is much larger than the pressure of the radio jets, assuming equipartition and under reasonable physical parameters.
