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Economy ministry says urgent economic reforms coming

Responds to pressure from EC on macroeconomic imbalances

05 March, 16:22
Economy ministry says urgent economic reforms coming (ANSA) - Rome, March 5 - The Italian government said Wednesday that it agrees with an analysis by the European Union demanding fast action on economic reforms which it said are essential to boosting growth and productivity.

In a statement, the economy ministry said that reducing labour and income taxes must be a high priority to improve "the competitiveness of the Italian economy" and cope with economic imbalances. It noted that the new government of Premier Matteo Renzi has promised a series of reforms to be implemented quickly.

"Now the time has come to put at the center (of government priorities) economic growth and employment," the ministry said in a statement.

"The government intends to make enhance competitiveness and ensure strong, sustainable growth and full employment," the statement said.

Earlier in the day, European Economic and Monetary Affairs Commissioner Olli Rehn increased pressure on Rome to adopt urgent measures after the Commission said Italy was under "specific monitoring" over its macroeconomic imbalances. "We invite the new government to address the imbalances that require urgent policies and to carry out reforms to strengthen growth and employment," Rehn said.

The ministry acknowledged that growth and competitiveness have been "limited" by the high taxes on labour and income.

But it said that Italian businesses, particularly manufacturers, have set a strong example by continuing to adapt to external markets and grow, pointing to balance of trade figures as evidence.

"To counter the recession, Italian manufacturers have resorted to reducing the costs of production, improving product quality and containing prices and profit margins...and this has allowed a significant improvement in external accounts," said the economy ministry.

As a result, Italy's trade balance in three years has moved from the deficit of 30 billion euro in 2010 to a surplus of almost 10 billion euro last year, said the ministry.