Giovedì, 18 Ottobre 2018

Italian businesses first to receive govt debt payback


Rome, March 28 - The Italian economy minister on
Thursday said the government's decision to pay back 40 billion
euros in public debt will go to private-sector companies before
it goes to banks over the next two years and will produce
positive stimulus results by mid-2013.
In repaying government debt, the government foresees "a
chronological order in two phases: first, non-financial
institutions, then the banks," said Vittorio Grilli before a
special parliamentary committee.
"Injecting liquidity into the economy will jumpstart
domestic demand already by the middle of the year".
To meet all of its commitments, including social spending,
the government announced plans last week to pay back debt by 20
billion euros in 2013 and 20 billion euros in 2014, with the
hope of a major stimulus for the economy.
The repayment plan had been fiercely criticized by the
anti-establishment 5-Star Movement (M5S) of Beppe Grillo, which
holds the balance of power in parliament which remains divided
after elections last month produced no clear majority nor
consensus to compromise.
On Thursday the populist M5S warmed to the plan.
"We find it favorable that the banks must wait their turn,"
said M5S House Whip Vito Crimi.
Grilli also said the 3% ceiling set for Italy's budget
deficit in relation to its GDP was "insurmountable" and would
remain unchanged.
Relaxing its budget-deficit targets was made possible after
the European Commission (EC) in Brussels gave Italy more
flexibility in its national debt levels despite a stability pact
signed by nations including Italy that fixed those debt levels.
The measure was intended to help companies facing a credit
crunch and recession.
The outgoing government, led by caretaker Premier Mario
Monti, has raised its deficit target for 2013 to 2.9% of gross
domestic product - a dramatic increase from its earlier target
of 1.8% of GDP.
It has also slashed its economic forecasts for 2013,
predicting a 1.3% contraction, compared with an earlier
prediction of a 0.2% fall in GDP.
Grilli predicts next year will see an improvement, with
Italy's economy expanding by 1.3%.
That's slightly higher than a previous forecast of 1.1%
growth in 2014.

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