Italy has until 2007 to correct budget deficit

The European Commission has told Rome that Italy’s budget deficit must be reined in by the end of 2007. 

Italy’s deficit must be reduced to below EU rules setting a maximum annual public debt imit of three per cent of GDP.

Figures indicate that Italy's budget deficit remained at 3.2 per cent of GDP in 2001, 2003 and 2004.

“Italy needs to correct its deficit rapidly and durably. This requires a structural adjustment of the government finances as well as addressing the competitiveness problems of the Italian economy which will push the country back on the growth path,” said Joaquín Almunia, EU commissioner for economic and monetary affairs.

The commission has also urged Italy to implement Rome’s 2005 budget with caution in order to avoid further slippages.

The commission is pushing for Italy to improve on collecting and processing government data that could help the overall process of lowering the deficit for 2007.

European finance ministers (ECOFIN) are expected to endorse the recommendations at a meeting on July 12 in Brussels.

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