ITALY SEEKS NEW DEAL TO SCRAP EU AUSTERITY AS ITS ECONOMY STALLS

ITALY SEEKS NEW DEAL TO SCRAP EU AUSTERITY AS ITS ECONOMY STALLS

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ITALY-SEEKS

According to the independent newspaper, Italy is preparing to negotiate a new deal with the EU that will allow it to reject the politics of austerity and boost public spending in an urgent bid to rescue its crumbling economy.

New figures released on Friday showed the Italian economy achieved 0 per cent growth in the second quarter of this year, down from an already disappointing 0.3 per cent in the first quarter. And experts fear the government could be forced to downgrade its growth forecast for this year to 0.8 per cent or even less.

Speaking to the daily newspaper La Stampa, Matteo Renzi’s economic development minister, Carlo Carlenda, said Italy was “fighting to change” a deficit reduction target for 2017 of 1.8 per cent, set by the European Commission.

“We are discussing with Europe how to address the absolute necessity of boosting public and private investment,” Mr Carlenda said.

Davide Policastro, an Italian political analyst, told The Independent that the government needs the EU to agree to relax the rules in order to “relaunch” its stalling economy.

It is the polar opposite of the UK’s policy of austerity – and risky, for a country which already has a ratio of debt to GDP of more than 130 per cent.

“The government wants a more expansive – and expensive – politics, but to do so it needs to break the EU cap of the deficit/GDP ratio,” he said.

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