Monday

4th Jul 2022

Italian 'national consensus' urgent, says Brussels

  • Rome: The government needs to act urgently, the commission has warned (Photo: Giampaolo Macorig)

The European Commission has called on Italy to build a "national consensus" between political parties and with the unions to assure the implementation of austerity measures and structural adjustment in the wake of a surprise downgrade in the country’s credit rating by Standard & Poor’s.

"There is a clear need to build national consensus at the political level but also between social partners [EU jargon for trade unions and employers] to adopt and implement an agenda of growth as a matter of urgency," EU economy spokesman Amadeu Altafaj-Tardio told reporters in Brussels on Tuesday in response the the move by the credit rating agency.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The government has been beset with divisions in the governing coalition over aspects of the country’s austerity packages and resistance from trade unions, who staged a one-day general strike on 6 September against the cuts.

The commission would not respond directly to the S&P’s rating decision but offered its support to Italy, saying that the EU executive’s assessment of Rome’s two austerity packages, worth €48 billion and €45.5 billion respectively unveiled over the summer, were "even more ambitious" than those recommended by Brussels and endorsed by the Council of Ministers in July.

"Full implementation should allow Italy to achieve a sizeable primary surplus in 2013 and will be instrumental in putting a very high government debt on a steadily downward path," Altafaj-Tardio continued.

He said that the country is "taking the necessary measures ... to meet its targets."

But the verbal support offered to the Italian government was peppered with calls for Rome to act “boldly”.

"It is essential to pursue a bold reform agenda with comprehensive measures to tackle the deep-rooted structural weaknesses of the economy," he said.

"This is one of the major challenges that Italy faces nowadays."

The rating agency kicked the country’s rating down a notch on Monday, from A+ to A, blaming the country’s political crisis as much as the state of its economy

"The downgrade reflects our view of Italy’s weakening economic growth prospects and our view that Italy’s fragile governing coalition and policy differences within parliament will likely continue to limit the government’s ability to respond decisively," the agency said in its assessment.

"The 'political' and 'debt' scores were the primary contributors to the downgrade."

The agency also said that austerity measures could lower growth, resulting in the government likely being unable to meet its austerity targets.

"More subdued external demand, government austerity measures, and upward pressure on funding costs in both the public and private sectors will, in our opinion, likely result in weaker growth for the Italian economy," the paper said.

The commission said it was "more optimistic".

"When could [austerity and reforms] deliver? I am more optimistic ... and think that there are measures than can deliver in a shorter term and can have a sensitive impact in terms of growth in the coming months and years. We don’t have to wait till 2013 or 2014."

Italian Prime Minister Silvio Berlusconi for his part attacked the agency in a brief statement, saying: "The assessments by S&P seem dictated more by newspaper stories than by reality and appear to be negatively influenced by political considerations."

Mass strikes, protests hit Italy, Spain over EU-imposed austerity

Popular anger over Europe’s strategy of austerity for exiting the eurozone crisis spread to Italy on Tuesday as the country was paralysed by a general strike. Hundreds of thousands of ordinary Italians poured into the streets of over a hundred cities and towns to protest what Brussels, Frankfurt and Berlin demand.

ECB returns to markets to help Italy and Spain

The European Central Bank has decided buy bonds from troubled eurozone countries after a five-month pause in a bid to stem the crisis from spilling to Italy and Spain.

Top eurozone officials meet amid alarm on Italy

Top eurozone officials are meeting Monday morning to discuss the debt crisis in the 17-nation single currency region amid concerns that it could spread after Italy last week saw a spike in its borrowing costs.

Italian rating hit by Moody’s downgrade

In a move that ratchets up the pressure on EU leaders to work faster to resolve the eurozone’s banking and sovereign debt crisis, Moody’s Investors Service on Tuesday knocked down Italy’s credit rating by three notches.

Italian bonds shatter 7% bail-out ceiling

The interest rate on Italian 10-year government bonds breached seven percent on Wednesday, shattering the psychological bail-out ‘ceiling’. Greece, Portugal and Ireland all had to seek multi-billion-euro bail-outs when their 10-year bonds exceeded this threshold.

News in Brief

  1. EU Parliament 'photographs protesting interpreters'
  2. Poland still failing to meet EU judicial criteria
  3. Report: Polish president fishing for UN job
  4. Auditors raise alarm on EU Commission use of consultants
  5. Kaliningrad talks needed with Russia, says Polish PM
  6. Report: EU to curb state-backed foreign takeovers
  7. EU announces trade deal with New Zealand
  8. Russia threatens Norway over goods transit

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  2. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  3. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis
  4. Council of the EUEU: new rules on corporate sustainability reporting
  5. Nordic Council of MinistersNordic ministers for culture: Protect Ukraine’s cultural heritage!
  6. Reuters InstituteDigital News Report 2022

Latest News

  1. Nato's Madrid summit — key takeaways
  2. Czech presidency to fortify EU embrace of Ukraine
  3. Covid-profiting super rich should fight hunger, says UN food chief
  4. EU pollution and cancer — it doesn't have to be this way
  5. Israel smeared Palestinian activists, EU admits
  6. MEPs boycott awards over controversial sponsorship
  7. If Russia collapses — which states will break away?
  8. EU Parliament interpreters stage strike

Join EUobserver

Support quality EU news

Join us