Economy Minister Pier Carlo Padoan said Friday that the government's 2015 budget bill had been well received by investors and improved the country's credibility.
"The operators and the markets have given the budget law, orientated towards growth, a good reception," he said. "More generally, they are giving full confidence to a political project that intends to promote the country's development, unravelling the structural knots that have accumulated over time". He said that the Italian government has also brought the importance of emphasizing growth and strategic investments to the top of the agenda for the European Union, "anticipating the (300-bn-euro) plan of new European Commission President Jean-Claude Juncker".
The government of Premier Matteo Renzi argued strenuously for a more relaxed interpretation of EU budget deficit and debt regulations in order to allow countries such as Italy, hit hard by economic weakness, to spend more on stimulative measures.
This week, EU officials gave early approval to budget revisions worth 4.5 billion euros to further slash Italy's structural deficit, reducing the deficit-to-GDP ratio by 0.3% rather than 0.1% as previously planned.
However, Renzi won some concessions as the 0.3% reduction was less than the reported initial EU demand of a cut of about 0.5%.
Meanwhile, Padoan said that Renzi's cabinet continues to make fundamental labour market reforms a high priority, and said any cut to labour taxes is a structural could have a "significant" impact if businesses then use the savings to re-invest. Concerns have been raised that banks are reluctant to lend due to the downturn, and businesses and households are slow to borrow, bringing investment to a standstill.
Padoan said it would be helpful if Italians were less "bank-centric" and found "more innovative" of increasing their investments and savings in ways that would contribute to growth.
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