Italy’s economy is growing more than expected which means extra fiscal space to aid families and businesses, Finance Minister Giancarlo Giorgetti said.
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Italy’s economy is growing more than expected which means extra fiscal space to aid families and businesses, Finance Minister Giancarlo Giorgetti said.
The country’s unexpected 0.5% growth in the first quarter of this year “creates some margins for new interventions in the fall to support businesses and families struggling with inflation,” Giorgetti told newspaper Il Sole 24 Ore in an interview Saturday.
Further help should also come from the European Union’s recovery fund. In separate comments to reporters after a meeting of the bloc’s finance ministers in Stockholm, Giorgetti said he is confident that the fund’s latest installment will be disbursed within days. The payment has been delayed as the European Commission, the EU’s executive arm, carries out further checks on Italy’s spending plans.
Read More: EU Delays Disbursement of €19 Billion of Pandemic Aid to Italy
Italy’s first-quarter economic growth was more than twice as much as economists anticipated. That might fuel the prospect that Italy can meet the government’s 1% growth target for 2023, which could additionally buy fiscal space to deliver aid.
Regarding the EU’s stability pact which is being renegotiated, Giorgetti saw little room for an agreement given deep differences among member nations.
“My counterproposal is to treat investment spending differently, particularly for the recovery plan, and defense spending, particularly for Ukraine,” he told reporters in Stockholm. “Germany demands geometrical, numerical rules” which are “absurd,” he added.
The Bank of Italy said Friday that Italy must keep working to reinvigorate its growth potential to keep the public finances on track in the face of rising interest rates. Just hours after data showed the euro zone’s third-biggest economy returned to expansion with a surprisingly strong 0.5% surge from the prior three months — outpacing France and Germany — the central bank warned that underlying challenges haven’t gone away.
In the Sole 24 Ore interview, Giorgetti also said that Italy’s finances are solid and improving which means he sees no reason for any ratings agencies to make any changes when review periods come up in May.
Asked about calls from EU partners for Italy to ratify a reform of the European Stability Mechanism bailout fund, Giorgetti told the newspaper the government is seeking progress on completing a banking union and on issues including boosting European guarantees to promote private investments.
(Updates with Giorgetti comments in Stockholm from third paragraph)
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