Italy Trea­sury min­is­ter sees stag­na­tion rather than re­ces­sion

Gulf Times Business - - BUSINESS -

Italy’s Trea­sury Min­is­ter said yes­ter­day he did not see a re­ces­sion on the hori­zon but ac­knowl­edged there could be a pe­riod of stag­na­tion.

The Ital­ian econ­omy has been slow­ing for the last year and gross do­mes­tic prod­uct de­clined by 0.1% in the third quar­ter, the weak­est re­sult since 2014.

On Fri­day in­dus­trial out­put for Novem­ber came in much weaker than ex­pected, in­creas­ing the risk of re­ces­sion for the euro­zone’s third largest econ­omy.

“Let’s wait for data for the last quar­ter of 2018. I don’t see a re­ces­sion, I see a sit­u­a­tion of stag­na­tion,” Gio­vanni Tria said in an in­ter­view in Ital­ian daily Cor­riere della Sera.

Tria con­firmed the gov­ern­ment’s com­mit­ment to cut­ting the coun­try’s debt pile, the sec­ond-high­est in Europe, but said growth de­pended also on mon­e­tary pol­icy and the in­ter­na­tional out­look.

In Oc­to­ber, the Euro­pean Com­mis­sion re­jected Italy’s 2019 bud­get which had in­cluded a deficit tar­get of 2.4% of gross do­mes­tic prod­uct, say­ing it would not cut Italy’s debt and was an “un­prece­dented” breach of EU fis­cal rules.

In De­cem­ber, Rome re­jigged the tar­gets, cut­ting the planned deficit to 2.04% to strike an agree­ment with Brus­sels.

“The deficit will be kept un­der con­trol,” Tria said, adding he had never con­sid­ered step­ping down as min­is­ter due to wran­gling over the bud­get.

Asked about a tar­get of rais­ing 18bn eu­ros this year from pri­vati­sa­tions, the min­is­ter said the gov­ern­ment was look­ing at trans­fer­ring stakes in state-con­trolled hold­ings to state lender Cassa De­positi e Prestiti (CDP).

“We are study­ing the ques­tion,” he said.

It is not clear if, un­der EU rules, the Trea­sury would be able to sell such stakes to CDP to cut debt.

Tria said in the fu­ture he hoped EU bud­get rules could be ad­justed to take ac­count of chang­ing con­di­tions in or­der to help growth and fos­ter fi­nan­cial and so­cial sta­bil­ity.

Tria: No step­ping down.

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