Letta tries to reassure Europe. Barroso “The marathon is by far not over”

President Barroso: it is necessary to reduce “the enormous mountain of debt that stands in the way of Italy’s future”. Prime Minister Letta: “Our choices will make Italy competitive, a real protagonist in the EU: privatization, flexible labour market and institutional reforms by the end of 2014”

The EU appreciates the efforts made in consolidating Italian finances and in promoting structural reforms, but this is not the time to “rest on its laurels” for Italy, it is necessary to proceed with “determination”. This is the message sent by the European Commission President, José Manuel Barroso, after the meeting with “his dear friend” Enrico Letta in Brussels. Italy, “thanks to its impressive efforts,” was able to exit the Excessive Debit Procedure, has “re-established confindence and brought spreads down” saving “billions of euro to tax payers.” Italy “under the leadership of Prime Minister Letta” has introduced measures “to fight unemployment, to simplify the public administration, to reduce the number of infringements of EU law and to make better use of EU funds.” Yet, Barroso underlined that “the marathon is by far not over” and “it is crucial not to become distracted on the last kilometers” because “the slightest doubt in our determination” could cause an “erosion” of what has been achieved, that is “the renewed confidence regarding Europe.”

Italy now has to focus on two crucial elements, according to the Commission: “reducing the enormous mountain of debt that stands in the way of Italy’s future” and “unlocking the country’s growth potential by implementing structural reforms.” The Commission “noted with satisfaction” the privatisation plan as well as the labour market reform, and thinks that “only solid public finances and structural reforms can allow Italy to have a primary surplus” (much needed by Italy to reduce its public deficit, now over 130 percent of the GDP).

“This year is different,” said Prime Minister Letta, “we have started a new year without being overwhelmed by a financial emergency”. According to Letta, this will allow the Government to “operate medium and log term choices” which “we want to put in place” and “will make Italy more competitive” and “a protagonist in Europe.” In July Italy will take the Presidency of the Council, and Letta wants this semester to be full of discussions about “growth and jobs” in order to fight a tragic social discomfort.” In this view, Italy will fight for contractual arrangements, arrangements among States (also know as Pacts for Growth, Competitiveness and Employment), which are supposed to push economically unsound countries to complete their reform commitments. “We believe that the exchange between reforms and flexibility could be extremely useful when correctly managed” added Letta.

The Prime Minister has also presented the Commission this year’s targets for a Italy, which “confirm our will to take Italy back on the path of growth” (according to government’s data, 1 percent GDP growth this year and 2 percent in 2015). Privatisations will play a main role: the package is “currently the biggest in Europe and for sure the biggest in Italy since a long time ago”. The labour market reform will be crucial as well: it is to be presented in the following weeks, and aims to create a “more dynamic and flexible market.” Last, Letta underlined the importance of institutional reforms because “only a democracy that can choose is able to make crucial choices,” as well as the importance of the three “remarkable reforms we have to realise by the end of 2014,” namely “the electoral reform, the end of paritary bicameralism and the reform of Title V in order to simplify the relationship between centre and periphery.”

Alfonso Bianchi