Martedì, 16 Ottobre 2018

Italy hales EU move for greater budget flexibility


(By Christopher Livesay)
Rome, July 3 - Italian Premier Enrico Letta was
jubilant on Wednesday following the European Commission's
decision to allow more budget flexibility for countries like
Italy keeping the deficit below the European Union's ceiling of
3% of GDP in order to boost growth.
"We did it!" he posted on Twitter, followed shortly
thereafter by an official statement from his office:
"The President of the European Commission (Jose Manuel)
Barroso has just announced in Strasbourg that countries out of
an excessive-deficit procedure, like Italy, will be given more
flexibility in the 2014 budget for investments in production and
to relaunch growth.
"This is the prize for the investment this government has
made since the beginning to respect public finance targets".
Letta, who was sworn in on April 28 at the helm of a broad
left-right coalition government, has vowed to boost growth while
maintaining the deficit below the EU's ceiling as the country,
the eurozone's third-biggest economy, is struggling with its
longest recession in over two decades.
On Wednesday Barroso announced that the Commission will
allow "temporary deviations" from midterm budget targets to
enable public investments co-financed by the EU.
"When assessing the national budgets for 2014 and the
budgetary outcomes for 2013, we will again, in full respect of
the Stability and Growth Pact, consider allowing temporary
deviations from the structural deficit path towards the
medium-term objectives set in the country-specific
recommendations on a case-by-case basis," Barroso said in
"Such a deviation must be linked to national expenditure on
projects co-funded by the EU under the Structural and Cohesion
policy, Trans-European Networks or Connecting Europe Facility
with a positive, direct and verifiable long-term budgetary
Italy is expected to contract 1.8% in 2013, according to
the Organization for Economic Cooperation and Development.
The country's declining growth has been linked to a massive
round of austerity cuts brought about during the last
administration of Mario Monti in order to curb Italy's
skyrocketing borrowing costs amid the euro crisis.
Rising unemployment was also an unintended consequence,
with 12.2% of the workforce - over three million people -
currently out of a job, the highest since the current method of
evaluation began.
For youth the situation is even more dire, with nearly 40%
of those under 25 out of work.
Giorgio Squinzi, the president of the industrialists'
confederation Confindustria, said the EC decision was "good
"I believe as a country, as Italians, with all the
sacrifices we've made in this recent period, we amply deserve
it," he added.
Economy Minister Fabrizio Saccomanni seconded the
sentiment, saying the added budget flexibility "rewards the work
done over the last months and wipes away the skepticism of
He added that Italy was on target to "balance its budget in
structural terms" in 2013.
A country is considered to have balanced its budget in
structural terms if government revenues match expenditure when
the data is adjusted to take account of fluctuations in the
business cycle.
"This is the most serious crisis since the end of World War
II, but the first signs of stabilization are starting to
appear," Saccomanni said.
The economy minister stressed that efforts must continue if
the country is to "achieve the reversal of recessionary trends
in the second half of the year".
Italy is expected to have a budget-deficit-to-GDP ratio of
2.9% in 2013.

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