04.12.2011 - In the statement, Vice President Rehn welcomed the adoption by the Italian Government of a far-reaching package of fiscal measures and economic reforms and described it as a much needed signal of a new approach to economic policy-making in the country.
Following the adoption by the Italian Government of a far-reaching package of fiscal measures and economic reforms, the Vice President of the European Commission in charge of Economic and Monetary Affairs and the Euro, Olli Rehn, delivered the following statement.
"I welcome the adoption of the significant package of budgetary and economic policy measures by the Italian government today. This package is a very important step to shore up the public finances and support economic growth, while preserving social equity and fairness, through measures concerning taxes, pensions, reform of public administration, liberalisations and incentives to firms.
The Commission will carry out a detailed assessment of the new package once we have received all the details. But overall this set of measures is timely and ambitious, as it gives a much needed signal of a new approach to economic policy-making.
The package, which entails an additional net consolidation effort of around €20 bn, or 1.3% of GDP, should help Italy to achieve the target of a balanced budget in 2013. This is essential to reinforce the credibility on the Italian economy but also to regain control on the very high debt and alleviate the burden on future generations of Italians.
In the area of pensions, some long-awaited measures are being introduced with the aim to more quickly reduce the pension bill while strengthening the fairness of the system and increasing labour force participation.
In the area of taxation, revenue-raising measures will be partly offset by fiscal incentives to support businesses and employment, in a move that implies a reorientation of the tax burden away from labour and capital onto consumption and property. The intensification of the fight against tax evasion is also welcome.
The low growth potential of the Italian economy cannot be corrected overnight, but the measures announced today will help removing some bottlenecks to growth. More is needed along the lines that I indicated at the last Eurogroup meeting of 29 November. The Government has announced further structural measures coming soon, including in the labour market area, in consultation with the social partners.
It is crucial to keep the momentum in economic reform and in the political renewal to take further decisions that can bring more growth and more and better jobs in a fair way.