Italy's reform, spending review results uncertain-EC-update2

Commission says high debt weighing down efforts to changes

(ANSA) - Brussels, November 11 - The European Commission said Tuesday in a report on Italy's macroeconomic imbalances that the results of the government's ongoing structural reforms and spending review were still uncertain. Italy's drive to enact reforms has increased, but "progress is uneven", with many measures "still waiting for full approval or enabling decrees and therefore the results remain uncertain," the commission added in its report.
    There were also "significant uncertainties" about the government's review of public spending, said the commission. The progress Italy makes in the next few months on structural reforms will be "crucial" to the commission's assessment of whether Rome is addressing the country's macroeconomic imbalances, it said. The government of Premier Matteo Renzi must guard against "institutional bottlenecks" and "barriers" that may slow implementation of reforms, said the report.
    Yet reform is essential to deal with the country's massive public debt of more than two trillion euros that weighs down economic growth, it added.
    "The very high debt is a big weight on the Italian economy, a source of vulnerability in the current situation of inflation and low growth," the report said.
    "It is a brake on growth due to the high taxes needed to service it".
    Delays in Italy's plans to sell off stakes in State assets are not helpful, the report said.
    "The Italian privatization plan is suffering delays in its implementation," the EC said.
    "Aside from the announcement of the plan (for asset sales) worth 0.7% of GDP in the 2014-17 period...limited information is available about the quantity of stakes (to be sold), what companies (they will be sold in), and under what timetable".
   

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