Martedì, 18 Settembre 2018

Europe sounds alarm over Italy's economic 'imbalances'


(By Paul Virgo) (see related stories on govt's economic
blueprint and political situation)
Brussels, April 10 - The European Commission (EC)
said that there were major imbalances in the recession-hit
Italian economy that require urgent attention in a report on
"Italy is experiencing macroeconomic imbalances, which
require monitoring and decisive policy action," the EC said in a
report on 13 European Union states whose economies are
considered in need of "in-depth reviews".
The European Union's executive suggested that if these
issues were not tackled there was a risk the eurozone's debt
crisis could flare up again.
"In particular, macroeconomic developments in the areas of
export performance and the underlying loss of competitiveness as
well as high public indebtedness in an environment of subdued
growth deserve continued attention in order to reduce the risk
of adverse effects on the functioning of the Italian economy and
of the Economic and Monetary Union".
The warning came on the day that outgoing Premier Mario
Monti's cabinet approved its economic blueprint for 2013, the
According to this, Italy's deficit for 2013 should be 2.9%
of gross domestic product (GDP), below the 3% threshold allowed
by the European Union, which means Italy should emerge from the
procedure it is under for excessive deficit.
It also said that Italy's huge public debt is expected to
climb to 130.4% of GDP this year.
Monti said that those forecasts showed that austerity
measures introduced by his emergency government of unelected
technocrats since it came to power in November 2012 had restored
health to the public finances.
But those measures have also deepened Italy's longest
recession in 20 years, taking unemployment up to record levels
of close to three million.
On Tuesday Istat released data that showed the recession,
which is forecast to continue until the second half of this
year, has had a massive impact on Italian's purchasing power,
consumer spending and saving rates.
There were more negative figures on Wednesday, when the
national statistics agency said industrial production fell 3.8%
in February compared to the same month in 2012, the 18th
consecutive drop in the year-on-year seasonally adjusted data.
It added that output in February was 0.8% lower than in
January, effectively wiping out the 1% rise in the
month-on-month data that was registered in January with respect
to December.
Istat said car production was hit particularly badly,
falling 16.6% in comparison with February 2012.
At about the same time Istat was releasing that data,
Giorgio Squinzi, the president of Italy's powerful industrial
employers' confederation Confindustria, urged the political
parties to overcome their differences and form a government to
tackle the country's economic ailments.
"We've run out of time," Squinzi said regarding the
political deadlock that has followed February's inconclusive
general election.
"We don't need a government at once, we need it even sooner
than that".
Squinzi said the stalemate over the last 45 days had cost
Italy 1% of its annual gross domestic product. "That is 1.6
trillion euros," he said.

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