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Gentiloni urges Italy to stick to austerity

23 maggio 2018 | 17.56
LETTURA: 1 minuti

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The eurosceptic, populist government poised to take office needed to maintain Italy's commitment to cut its massive public debt pile, outgoing premier Paolo Gentiloni on said on Wednesday.

"The EU has recognised the results of our efforts to stabilise and reduce the public debt," Gentiloni tweeted.

"Staying on this path will form the basis of job creation and development - straying from it jeopardises the sacrifices made by families and their savings," the tweet added.

Gentiloni's comments came amid jitters in the European Union and financial markets over the expansionary economic agenda of the nascent coalition between the Five-Star Movement and the League party.

The populist parties say they want revisions to the EU's Stability and Growth Pact, which sets a tough budget deficit limit of 3 percent of GDP.

The plan aims to reduce debt through "the revival of internal demand", not by continuing austerity but does not explain how it will fund tens of billions of euros of extra spending and lost revenues from tax cuts and pension reform reversals.

The European Commission on Wednesday said that Italy was “currently” fulfilling its obligations under EU budget rules to try and rein in its debt, but that further efforts would clearly be needed.

Italy's public debt of 132 percent of national output is the second highest in the EU after Greece.

Italy, a founder member of the EU is its fourth largest economy and the third largest in the eurozone.

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