Italy has made 'some' progress says EC

Still work to be done

(see related)(ANSA) - Brussels, February 26 - 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.