BRUSSELS – the Finance ministers of THE euro zone have made the views of the european Commission on the Financial 2017. However, while urging Italy to introduce measures to comply with the Pact of Stability and Growth pact, the Eurogroup has given Rome time to adopt new choices on the budget, taking into account that after the referendum vote on Sunday, Italy and is run by a government resigning, dedicated to current affairs. The compromise reflects the political uncertainty facing the country.
“we encourage Italy to take the necessary measures to ensure that the Financial 2017, will be respectful of the Covenant”
“we encourage Italy to take the necessary measures to ensure that the Financial 2017, will be respectful of the Covenant,” read the statement posted this afternoon here in Brussels, at the end of a meeting of Finance ministers of the euro area. “The high level of public debt remains a source of concern. We recall the commitment in 2017 to use to reduce debt, unexpected tax revenues or unexpected expenditure savings and to accelerate privatisation”.
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In a press conference, the president of the Eurogroup Jeroen Dijsselbloem has indicated that it has spoken with the minister of the Economy Pier Carlo Padoan this morning. The minister has preferred to remain in Rome, because of the crisis that erupted after the 60% of italians rejected in a referendum the reform of the Senate proposed by the government Renzi. “We agree that it is difficult at this time for Italy to engage in additional measures” on the front of the deficit, said Dijsselbloem.
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Asked how long the Eurogroup is prepared to give to Italy to get in the rule, Dijsselbloem replied: “it Depends on the political process, the Italian”. The position of the Eurogroup is a compromise between the different forces in the field. The position written is similar to the opinion of the Commission, but in the press conference, the president of the Eurogroup has given Italy room to maneuver. The same happened at the beginning of the year, when Spain was without a government with full powers.
in Short, for now, Italy has avoided the worst, at least in its relationship with Brussels. Prevails, and the waiting at this stage. The future depends on a solution to the crisis in the Italian by a report on the state of the public debt that the european Commission has announced for the next few weeks and which the Eurogroup has taken note. Net of the events in Rome, the relationship will be the occasion to decide, in the case of open infringement proceedings for failure to debt reduction.
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The stance of wait-and-see ministers comes after that, in November, Brussels had said that to consider the budget for 2017 at risk of non-respect of the Pact. More decisive was the decision of the Eurogroup on the idea to change the budgetary position of the euro area from neutral to expansionary. The Commission’s proposal was rejected. The Eurogroup stressed that the fiscal stance should be neutral and that we must find “a balance between economic support and sustainability of the financial statements”.
To a specific question, if the Eurogroup had approved the idea of increasing the deficit, aggregate euro zone of 0.5% of gross domestic product in 2017, Dijsselbloem replied: “No. No agreement on this aspect”. The countries that have surplus budget or a balanced budget can, if they want to increase spending, but are not required. For the Commission, who had proposed this change, the decision is a defeat for the policy.
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