Reforms, Rehn postpones the day of reckoning for a while (but appreciates Padoan)

The Commission will present its report in macroeconomic imbalances in Italy and in other 15 countries. It is necessary to reduce the “burdensome debt” with “higher structural adjustment.” On the new Minister: “He did very well at OECD, he knows what to do to relaunch growth.”

For sure a deficit reduction, which will be at 2.6 percent this year according the Commission Winter Forecast, but this is not enough. According to Olli Rehn, Italy needs “somewhat higher structural adjustment.” That is, growth and public debt, on which Italy was not active enough. Economic growth will be only at 0.6 percent in 2014 and 1.2 percent in 2015, while public debt will hit a record in 2014, 133.7 percent of GDP, decreasing to 132.4 percent in 2015. “While I was on board, coming back from Sidney,” said the Commissioner for Economic and Monetary Affairs during his press conference in Strasbourg, “I had a lot of time for reading the report on macroeconomic imbalances, which will be presented by the Commission next week, dealing with 16 countries (Italy included). “I reccomend you to read the text” in which there is an “analysis of the motivations of weak competitiveness and possible remedies.”

Rehn reminded the audience that growth forecast “have been revised downwards this year” even though “we foresee an increase by 0.1 percent in 2014 and by 0.3 in 2015,” but Italy needs “to bring down its very high public debt,” which is needed to be brought to the levels included in the Growth and Stability Pact, that is, 80 percent of the GDP. . According to Commissioner Rehn, Italy needs “tougher structural adjustments.” He added he does not know anything about Matteo Renzi’s plan; “I am sure Italy will stay committed with European Treaties, and I will be glad to cooperate with the new government’s efforts to bring about growth, recovery and job creation,” Rehn said. Talking about the new Italian Minister of Economy, Pier Carlo Padoan, he said his appointment is welcomed as “Minister Padoan authored several OECD reports dealing with growth and job creation,” he said, “he knows what to do, economically speaking, to relaunch growth.”

Alfonso Bianchi