Monday

20th Nov 2017

Italy to run balanced budget, minister says

  • Rome: the Monti government is on its way out (Photo: Giampaolo Macorig)

The Italian economy will run a balanced budget in 2013 before returning to growth the following year, the country's outgoing finance minister has told the European Parliament.

Speaking with MEPs on the Parliament's Economic committee on Monday (21 January), Finance Minister Vittorio Grilli said that "we expect to have a current account surplus by 2014".

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

Grilli added that the Italian economy would grow by over 1 percent in 2014 after two consecutive years of recession, but described this projection as "not really adequate" adding that "the country needs to enact a series of structural reforms."

However, he said that once the structural deficit had been eliminated there was "no reason to go any further with austerity."

Though modest, Grilli's economic projections are more optimistic than those of the Bank of Italy, which expects the country's economy to pull out of recession in the second half of 2013 and expand by a meagre 0.7 percent in 2014.

Grilli told deputies that the government had sought to shift its tax burden away from labour and consumption to property, alongside greater powers for local and national tax authorities to crack down on tax evasion. Last year a Bank of Italy study asserted that 27 percent of Italian GDP had eluded taxation.

For his part, German liberal MEP Wolf Klinz, chairing the meeting, said that the best demonstration that Italy was cracking down on tax avoidance would be by jailing Berlusconi, who was convicted of multi-million euro tax fraud in October last year.

Although Grilli, an economist turned minister, admitted that the severity of the country's austerity policies had hurt its economy, he insisted that, with financial markets jittery about Italy's solvency, the government had had no alternative to austerity.

"There is no doubt that major fiscal adjustments are not conducive to growth in the short-term. But if you are in the midst of a confidence crisis then the choice is simply not there," he said.

Bond yields on Italian ten year papers have fallen to around 4.2 percent, their lowest level since the start of the financial crisis, and well below the 6.45 percent level in November 2011 when former Prime Minister Silvio Berlusconi was ousted from his forth term as leader.

The technocratic government of ex-EU commissioner Mario Monti is serving out its last weeks in office with parliamentary elections to take place in February. The unelected Monti tendered his government's resignation after the 2013 budget was adopted in December.

Although there is mounting speculation that Monti, and potentially other ministers, will take senior posts after the poll on February 24 and 25, Grilli is among those to have indicated that he will not be part of the next government.

Monti attacks 'short-termism' in EU politics

Italian Prime Minister Monti has criticised fellow EU leaders for the way they dealt with the euro crisis and said the UK is right to pose fundamental questions.

Rehn under fire over Berlusconi remarks

EU commissioner Olli Rehn is at the centre of a political row after blaming Italy's former prime minister, Berlusconi, for the country's financial crisis.

MEPs ponder how to fight tax havens

After the Paradise Papers brought new revelations about tax dodging across the globe, including in the EU, the European Parliament wonders how to step up the fight.

News in Brief

  1. Bonn climate talks extend into Friday evening
  2. UK needs to move on Brexit by early December, Tusk says
  3. Puigdemont extradition decision postponed to December
  4. Ireland wants written UK guarantees to avoid hard border
  5. US did not obstruct climate talks, says German minister
  6. EU signs social declaration
  7. Puigdemont to be heard by Belgian judges
  8. Steep fall in migrants reaching EU

Stakeholders' Highlights

  1. European Jewish CongressAntisemitism in Europe Today: Is It Still a Threat to Free and Open Society?
  2. Counter BalanceNew Report: Juncker Plan Backs Billions in Fossil Fuels and Carbon-Heavy Infrastructure
  3. Nordic Council of MinistersNordic countries prioritise fossil fuel subsidy reform
  4. Mission of China to the EUNew era for China brings new opportunities to all
  5. ACCASmall and Medium Sized Practices Must 'Offer the Whole Package'
  6. UNICEFAhead of the African Union - EU Summit, Survey Highlights Impact of Conflict on Education
  7. Nordic Council of MinistersNordic Council Calls for Closer Co-Operation on Foreign Policy
  8. Swedish EnterprisesTrilogue Negotiations - Striking the Balance Between Transparency and Efficiency
  9. Access EuropeProspects for US-EU Relations Under the Trump Administration - 28 November 2017
  10. World Vision20 November: Exchange of Views at the EP on Children Affected by the Syria Crisis
  11. Nordic Council of MinistersSustainable Growth the Nordic Way: Climate Solutions for a Sustainable Future
  12. EU2017EEHow Data Fuels Estonia's Economy

Latest News

  1. EU keeps former Soviet states at arm's length
  2. EU leaders make pledge on social issues after populist backlash
  3. EU agencies and eastern neighbours This WEEK
  4. Germany slams Dutch call for more ambitious EU climate goal
  5. Mind the gap: inequality in our cities
  6. Climate activists 'disappointed' with EU at climate talks
  7. Davis outlines UK vision on Brexit in Berlin
  8. German coalition talks in near collapse