The Italian economy is still struggling to recover and deal with this long outage, the country announced its intention to review the European rules for setting up an expansionary budget in 2017, said Saturday the Minister of Development economic . The minister, Carlo Calenda, come three months after Rome had been granted some leeway “unprecedented” in its 2016 budget and that the European Commission has ordered it to tighten fiscal policy next year.
the minister was speaking following the publication by Eurostat of a note showing that the Italian economy has failed to develop between the first and second quarter of this year. Analysts predict that the government will now have to revise down its 1.2% growth forecast for this year and 1.4% in 2017, with a ripple effect on its plans to reduce the budget deficit. “The Treasury will present an update of the figures in September. I can not hide that the margin of maneuver is tight,” said Carlo Calenda everyday Turin La Stampa.
Beyond 3%
“We are discussing with Europe how to address the critical need to boost public and private investment.” The minister acknowledged implicitly that might mean a 2017 budget deficit higher than previously forecast, up to 3% ceiling limit set by EU rules.
The Commission has set in Italy budget deficit target of 1.8% for 2017, arguing that such adjustment is required to reverse the upward trend of the huge debt the country has reached 2250 billion in June. “We intend to respect the rules, but we are fighting for change,” said Minister for whom “the absolute limit is the debt, which can not increase.” “We’ve got a lot of flexibility and we intend to ask for more, the maximum possible, but always within the rules,” he said.
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