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Italy's Berlusconi pledges to respect EU stability pact



Prime Minister Silvio Berlusconi told lawmakers Tuesday that Italy would respect provisions of the European Union's Stability and Growth Pact in 2005 in the face of EU concern about the country's excessive public deficit.

"Italy, despite the difficulties, has always respected in the last four years the GDP-deficit ratio of three percent, which it will continue to do for the entire 2005," Berlusconi said in his speech presenting his new government's program to parliament.

But earlier this month, EU economic affairs commissioner Joaquin Almunia said the commission, the EU executive arm, would launch disciplinary measures against Italy by June for its excessive public deficit.

The Italian government has told Brussels that its public shortfall amounted to three percent of gross domestic product (GDP) last year. But the EU's statistics arm, Eurostat, refuses to validate the figure, which could be even greater, EU officials said.

The European Commission has forecast that Italy's deficit could stand at 3.6 percent of output this year and swell to 4.6 percent in 2006.

Berlusconi also vowed to take action on the country's debt-to-GDP ratio.

"We plan to reduce the debt with the objective of making it fall below 100 percent of the GDP," he said.


Web link: EU guide - Stability & Growth PactEUguides - Stability & Growth Pact

26 April 2005, 19:56 CET
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