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08 May 2012

Reuters: Monti pushes for EU growth agenda with Rehn


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Mario Monti set out Italy's priorities for growth in the eurozone, calling for changes in the way budget deficits are calculated, and urging the EU Commission to be more active in setting a growth agenda.


Monti said the time for studying and talking about how to boost the eurozone's stagnant economy was over. "I exhort Commissioner Rehn and the Commission to take a very active and leading role", said Monti.

He called for changes in EU budget rules to allow governments to pay outstanding bills to the private sector without pushing up their budget deficits, and greater distinction between public investments and other types of spending. The issue of late payments by the public sector is under the spotlight in Italy, where firms are being squeezed by a lack of liquidity, and the state is notoriously slow in settling bills with the private sector, estimated at least €60 billion.

Monti said budget deficit calculations should distinguish between "virtuous" public investments and less productive state spending, something so far resisted by Germany and some other northern European countries. "I am inviting my German interlocutors to consider that increasing production capacity through public investments is a virtuous policy", he said.

Monti also said he was convinced that it will not be long before the eurozone decides in favour of commonly issued bonds, another policy long favoured by Italy, which has high borrowing costs and one of the highest public debts in the eurozone. "I am convinced it will happen, not immediately, but the time is getting nearer and I consider it positive and important", Monti said.

Germany says the idea is premature until fiscal discipline is better established in the currency bloc.

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© Reuters


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