Stability Law, Padoan: correction deficit remains 0.1 points – Reuters Italy

Stability Law, Padoan: correction deficit remains 0.1 points – Reuters Italy

       

LUXEMBOURG / ROME, Oct. 14 (Reuters) – The Italian government now does not give in to pressure from the European Commission and confirmed that tomorrow, at the time of launching the Law of Stability , the correction of the structural deficit will be limited to 0.1 percentage points of GDP in 2015

       

The stance comes from the Minister of Economy, Pier Carlo Padoan, while there are increasing signs of a possible rejection of Europe.

       

“Our relations with the European Commission have always been very constructive. We keep faith with the rules, we exploit the flexibility of the rules and as always we will have an open dialogue with the Commission,” said Padoan at the end of Ecofin.

       

The government has postponed by one year, to 2017, the budget balance net of the economic cycle and one-off. With an economy in recession for the third time since 2008, Padoan said in recent days, fiscal adjustment can cause screwing in a “downward spiral, which could generate new recession and unemployment.”

       

In any case, say political sources, the government is prepared to set aside resources in the budget to increase the correction of a few tenths, in the event that negotiations with Brussels were to have a negative outcome.

       

“The maneuver does not change, but we are not unprepared or we will be surprised,” said today the Secretary to the Presidency of the Council Graziano Delrio.

       

The verdict will come to Brussels in November, with the new estimates of winter. For the moment, a European source warns that Italy must guarantee a “structural adjustment of at least 0.7% of GDP.” As a result, the source continues, a difference of 0.5 points between the commitments Italian and European demands would be rated as a “serious violation” of the recommendations of the EU.

       

The Council of Ministers on the Law of Stability is convened tomorrow at 15.00. The budget of 2015 has an expansive facility: about € 30 billion of funds raised, the increase in the deficit will reach 11.5 to 2.9 from 2.2% of GDP.

       

The measures to combat tax evasion and reduced premiums on gambling should ensure 3 billion, said Delrio to the Corriere della Sera. Read more …