In Italy still macroeconomic imbalances. EU calls for prudence – Economy

(ANSA) – MILAN, 02 JUN – In Italy there are still “excessive” macroeconomic imbalances according to the EU Commission. “Vulnerabilities are linked to high debt, a protracted dynamic of low productivity” which, with low employment, “damages potential growth that limits space for debt relief.” Furthermore, according to Brussels, “if the banking sector has become more robust and resilient in the pre-Covid years, vulnerabilities remain”. In particular, “non-performing loans, which have fallen in recent years, remain relatively high and are likely to increase once the support measures are withdrawn”. The call is for prudence even if the Stability Pact will remain suspended until 2023 and asks that support for the economy continue until 2022.

“It does not mean that we must not have an eye on what can constitute a permanent burden” on spending, explains the commissioner for economics Paolo Gentiloni. The EU Commission recommends for 2022 to “use the Recovery Fund to finance additional investments to support the recovery, while conducting prudent budgetary policies”. Furthermore, it must “limit the growth of current expenditure financed at the national level” and, “when economic conditions allow it, pursue a policy that aims to have a prudent position in the medium term and ensure sustainability”. At the same time, however, it must “increase investment to strengthen growth potential”. (HANDLE).

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Italy macroeconomic imbalances calls prudence Economy

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