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EU keeps up pressure on new Italian, Greek administrations

14 November 2011, 14:43 CET

(BRUSSELS) - The European Commission, whose auditors are poring over public finances in Italy and Greece, kept up the pressure Monday on incoming administrations in each country.

"It is clear that our diagnosis for the Italian economy does not change (just) because there is a new administration," The spokesman for EU Economic Affairs Commissioner Olli Rehn, Amadeu Altafaj, told a news briefing in Brussels.

He was referring to the decision in Italy to task former EU competition commissioner Mario Monti with forming a new government to pilot through austerity and economic reforms.

But Altafaj said last week's downward revision of a commission forecast for Italian economic growth next year of 0.1 percent, from a previously anticipated 1.3 percent, was the "clearest expression" of concerns in Brussels.

Answers from the previous Italian government to 39 questions put to outgoing finance minister Giulio Tremonti had been received on Saturday afternoon, Altafaj said.

These "very comprehensive" responses nevertheless require "quite a lot of work by the commission now" and a "fuller assessment of proposed measures" is being drafted by Commission experts currently in Rome, he said.

A first report, Altafaj said, would be presented by Rehn to eurozone finance ministers when they meet later this month, but EU experts can be expected to return with "regular frequency."

Commission President Jose Manuel Barroso spoke by telephone with premier-designate Monti on Monday morning.

But once Monti's new government is sworn in, probably later this week, measures being drawn up "will have to be discussed again" with the new authorities, Altafaj said.

As for Greece, Altafaj said the commission had yet to receive a written pledge from the new unity government that it will implement a strict programme of austerity and reform in exchange for blocked loans and a new EU-IMF bailout.

Rehn has demanded "clear, unequivocal and written" confirmation from Athens that it will follow through with the demands of foreign lenders.

Altafaj said that commission officials, working as part of an international "troika" with the International Monetary Fund and the European Central Bank, will be speaking to the new administration led by ex-ECB No. 2 Lucas Papademos but also the political parties making up the coalition government.

The spokesman said the troika would return to Athens "very soon" to assess whether conditions were ripe for the disbursement of eight billion euros ($11 billion) in loans frozen since August.

But no new meeting of eurozone finance ministers was likely ahead of their next scheduled gathering on November 29, he added. Greece needs the funds by mid-December to pay its bills.


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