Tags: Italy | EU | Growth

Italy Steps up Call for EU Growth Focus

Monday, 07 May 2012 08:52 AM

Italy on Monday responded to Francois Hollande's victory in France's presidential election by redoubling its calls for "concrete" steps to boost growth in the EU, with one ruling party calling for higher deficit targets.

"Europe has to give concrete signs that it believes in growth," Industry Minister Corrado Passera told reporters in the northern city of Brescia, calling for greater EU investments in infrastructure and technology.

Passera said he hoped to see Hollande's election victory followed by "concrete facts" on a pro-growth agenda for Europe. He added that this did not mean that rigorous fiscal policy should be abandoned.

The economic spokesman for one of the two main parties supporting Prime Minister Mario Monti's government, however, called on Monti to ease off on austerity, raise deficit goals and delay approval of new EU rules on public finances.

Hollande's victory marked an opportunity for Italy to end "mistaken economic policy choices" dictated by Germany, said Stefano Fassina, who is responsible for the economic policy line of the centre-left PD.

Monti should now "delay parliamentary approval of the EU fiscal compact (on tougher budgetary rules) and at the same time slow the process towards deficit reduction," Fassina told La Stampa daily, calling for a sharp increase in public investment.

On Sunday, following Hollande's victory, Monti called the French President-elect to offer his congratulations and renew a call for a greater focus on growth.

"Responsible public finance policy is a necessary but certainly not sufficient condition for the key objective: a sustainable growth which can create jobs and produce social equity," he said in a statement.

"For this reason, it is fundamental that Europe urgently adopts concrete policies for growth," he said.

Only last month, Monti delayed by one year the goal of balancing the budget in 2013 which his predecessor Silvio Berlusconi agreed with Italy's partners last summer.

Fassina is one of the more leftist members of the PD and his views may not be shared by some of the party's more centrist members.

Hollande has pledged to swing policy away from simple austerity to growth. More than half the vote in Greece in an election on Sunday also went to anti-austerity parties.

Hollande's victory marked "a defeat for the blind austerity advocated by the European Central Bank which is dragging everyone down, and so we must go in the opposite direction, the one that can save us from a shipwreck," Fassina said.

The PD forced Monti to compromise on his original labor market reform proposal which is still before parliament, insisting that he modify a plan to ease firing restrictions.

Monti has been among the forefront of European leaders saying growth much not be forgotten in the drive for austerity, though critics say his pro-growth rhetoric has not been matched by his policy choices.

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