Political instability may smother recovery says OECD
Growth at year's end if row solved Gurria tells ANSA01 October, 14:25
"The OECD believes Italy is recovering and growth may return at the end of the year (but) the current political instability is not helping this path," Angel Gurria told ANSA.
Gurria praised the five-month-old left-right government of the centre-left Democratic Party's Enrico Letta and its predecessor led by technocrat Mario Monti for maintaining fiscal discipline through sometimes painful austerity measures and enacting some structural reforms.
"We have worked a lot with this government and the preceding one and we believe the initiatives taken have been encouraging," he said.
"We hope the situation in Italy is resolved as soon as possible, that there is a normalisation...I think if the political question is resolved we will see the results of the sacrifices Italians have made over all these years".
Letta has called a confidence vote Wednesday to see if the government can carry on after ex-premier Silvio Berlusconi pulled out his ministers Saturday, withdrawing his required support as he did in the final phase of the Monti government.
The political stalemate about the media magnate's Senate ouster following his August 1 conviction for tax fraud has meant Italy was unable to avert a 1% increase in VAT which kicked in Tuesday, among several economic measures which have been put on hold.
Italy is struggling to emerge from its longest recession in 20 years and unemployment has hit record levels.