Lunedì, 22 Ottobre 2018

Rehn says political instability holding back recovery


Rome, September 17 - European Monetary and Economic
Affairs Commissioner Olli Rehn told an Italian Senate committee
Tuesday that political instability was hindering the country's
effort to pull out of its longest recession in over two decades.
Premier Enrico Letta's grand coalition government is in
danger of collapsing in the fallout of last month's decision by
the supreme court to uphold a tax-fraud conviction against
centre-right leader Silvio Berlusconi.
Berlusconi's People of Freedom (PdL) party has threatened
to pull its support from the government and sink it if its
alliance partner, Letta's centre-left Democratic Party, votes
against it on a Senate panel on Wednesday over moves to strip
the three-time premier of his parliamentary seat.
"In the case of Italy, where the economy still shows signs
of weakness, political uncertainty holds back investments and
the recovery," Rehn told the Senate budget committee.
The Commissioner added that the government's decision to
scrap an unpopular property tax called IMU to appease the PdL
"has raised and still raises concern" due to the problem it
creates in finding alternative revenue in an already tight
The European Central Bank said last week that Italy risked
missing its deficit target for this year and mentioned the
elimination of IMU as a factor.
The government recently raised its forecast for Italy's
deficit-to-GDP ratio for 2013 from 2.9% to 3%, the threshold EU
countries are not allowed to go over, following the scrapping of
IMU, which is set to be replaced by a new "service tax".
The European Commission closed an excessive-deficit
procedure against Italy in May after its deficit came in at 3%
last year and the government announced the 2.9% forecast for
this year.
Rehn warned that the Commission would not hesitate to open
a new procedure if Italy's deficit went back above 3%.
"Italy's excessive-deficit procedure is closed, but Italy
will have to honour its commitments," he said.
"(If the threshold is broken) the excessive-deficit
procedure will have to be reopened. Italy is fully aware of
Rehn compared Italy to a Ferrari, saying it needed a strong
economy to drive it forward
"Like Ferrari, Italy incarnates great tradition, style and
technical capacity," he said.
"But to be able to win, it needs a competitive engine and
it needs to be ready to change and adapt".
Rehn, a Finn, added that he hoped the return of his
compatriot Kimi Raikkonen to Ferrari next season could be a
"source of inspiration for Italy".

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