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Italy denies agreeing to IMF monitoring

Govt will only seek advice on reform plan, say sources

04 November, 11:23
Italy denies agreeing to IMF monitoring (ANSA) - Rome, November 4 - Government sources on Friday denied reports that Italy had agreed to let the IMF monitor its implementation of reforms designed to boost economic growth and cut the country's massive debt.

Media reports had said Premier Silvio Berlusconi, who is under intense pressure to resign with his majority in parliament crumbling and the country facing a possible financial calamity, agreed to the monitoring overnight at the G20 summit in Cannes.

But government sources said that, while Italy was willing to ask for advice from the IMF and the European Commission on its reform package, there would be no monitoring.

Berlusconi presented his controversial reform package at an EU summit last week after Europe demanded action to restore investor confidence in a nation that is at the centre of the eurozone crisis.

The markets seem to have doubts about the government's ability to implement the package given internal rifts and the weakness of its majority in the House, and Italian bonds and shares have come under attack.

A cabinet meeting ended late Wednesday without agreement on an emergency decree to implement some of the measures in the package.

On Thursday Two MPs belonging to Berlusconi's People of Freedom (PdL) party switched to the centrist opposition UDC.

The European Union is concerned that the whole eurozone will sink if Italy becomes unable to service a massive national debt that amounts to about 120% of GDP.

The Italian government's new measures were included in a letter of intent and have to turned into bills, approved at Cabinet and pushed through a parliament where the government has a slender majority.

The package includes a move to make it easier for ailing firms to fire workers, a measure blasted by opposition parties and trade unions, which have threatened to stage a general strike.

The government also promised to gradually raise the retirement age from 65 to 67.

In September approved a 54-billion euro austerity package aimed at balancing the budget in 2013 that convinced the European Central Bank to buy the nation's bonds to try to keep servicing the national debt at manageable levels.

But the government was asked to do more last month as experts fear the austerity measures will further slow an already sluggish economy if they are not accompanied by reforms and measures to boost growth, such as privatization and deregulation.

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