The European Commission on Monday will send a letter to Italy asking for the government to undertake precise commitments to correct its accounts by February 1, the date of the publication of new economic forecasts, sources said. Confirming reports by La Repubblica, the sources said Italy will be asked to reduce a 'gap' in its structural deficit by 0.2% of GDP, therefore less that the 0.3% highlighted in the Commission's opinion in Italy's 2017 budget in December. Economy ministry sources said Monday that a letter from the European Commission demanding budget corrections "has not yet arrived". The sources added that in recent days there has been "contact with the Commission to evaluate the opportune steps to avoid the opening of an infringement procedure and, at the same time, prevent the risk of restrictive budget interventions compromising the return to growth of the Italian economy, which started in 2014 but is still weak".
Foreign Minister Angelino Alfano said Monday that Rome was not willing to adopt growth-curtailing budget measures when asked about reports the EU wanted corrective measures worth around three billion euros. "We are in the middle of work between the competent economy ministry offices and the Commission, but there is still no letter," Alfano said. "We are certainly not willing to pass a budget that compresses or depresses growth, which is the essential good we are focusing all our attention on".
The International Monetary Fund (IMF) said Monday that it has cut its growth forecasts for Italy for 2017 and 2018. It expects Italy's GDP to rise 0.7% this year, down 0.2 of a percentage point with respect to its October estimate. It sees growth of 0.8% in 2018, down 0.3 of a point on the previous forecast. The IMF gave the figures as it updated its World Economic Outlook. It said the Italian economy grew by 0.9% in 2016. International Monetary Fund Chief Economist Maurice Obstfeld on Monday called on Italy to do more for its troubled bank sector. "More can be done," Obstfeld said. "There is space for action". Obstfeld said that an important reform to encourage consolidation and tackle the issue of non-performing loans has been approved and "now must be applied". Obstfeld also praised the structural reforms passed by the government of ex-premier Matteo Renzi as "very important".
He also said that much remains to be done in Italy, stressing that the approved reforms need to be applied. Renzi quit as premier last month after his flagship Constitutional reform was rejected in a referendum. Premier Paolo Gentiloni's current executive is mostly made up of former members of Renzi's cabinet.
ALL RIGHTS RESERVED © Copyright ANSA
