(see related)Italy has
"made some progress on enacting specific country recommendations
in 2015," a European Commission (EC) report on macro-economic
imbalances said Friday.
It cited school and labour market reform and "important"
measures for banks but went on to say there is still work to be
done "in some fundamental areas" such as spending cuts, taxes on
primary residences, the land registry office, wider fiscal
policy, collective bargaining and the statute of limitations
among other things.
"Given its centrality to the eurozone, Italy is a source of
potential fallout for other member States" and its economic
recovery "is affected by external conditions," the EC said in
its country-by-country report.
"Structural weaknesses continue holding back Italy's
capacity to grow and react to economic shocks...the country's
modest recovery and structural weaknesses are a negative
influence on European recovery and growth potential," the report
said.
The abolition of a tax on primary residences, IMU, "is not
in line with the reiterated recommendations of the Council to
shift the tax burden from productive factors onto consumption
and real estate", the report added.
Italy has also failed to revise land-registry values and
tax breaks as recommended, it said.
"hile Italy is making "significant bank reforms, areas of
vulnerability persist" as shown by "the recent rescue of four
small Italian lenders".
"The reabsorption of non-performing loans proceeds very
slowly" in spite of progress made, and "the banking system
appears to be weaker than that of other countries," the EC
report said.
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