ITALY NEWS

Italy dismisses EU warnings

European commission fears italy will be over budget by 4.6%
(issue no. 21/2005 / December 1, 2005)

Economy Minister Giulio Tremonti did not seem too worried about a recent European Commission forecast putting Italy’s budget deficit in 2006 at well over the agreed target. Tremonti claimed instead that comments in the EC report were generally positive and that, despite warnings about certain aspects of the 2006 budget, the overall framework of the budget bill was deemed solid.

 

Italy is one of five EU countries expected by the EC to go over the 3 percent limit for deficits in 2005, 2006, and 2007. The other countries were France, Germany, Portugal, and Greece. Last July the EU called on Italy to bring its deficit back under the 3 percent ceiling by 2007. As a halfway point on the way to achieving this goal, a 2006 objective of 3.8 percent was set.

 

Italy’s economy grew 0.3 percent in the third quarter, after a 0.7 percent rise in the second. The positive figures follow two quarters of negative growth. The EC put Italy’s economic growth this year at 0.2 percent, and predicted it rising to 1.5 percent in 2006 and 1.4 percent in 2007. These figures are below the average growth forecast for the 12 euro-zone countries: 1.3 percent in 2005, 1.9 percent in 2006 and 2.1 percent in 2007.

 

Foreign Affairs Minister Fini assured the EC that Italy would not spend more than what was established by the budget plan.

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