BRUSSELS (AP) — The European Union and Italy in particular must focus on making structural reforms to boost growth, not try to ease the rules limiting government debt, Italian Finance Minister Pier Carlo Padoan said Tuesday.
Italy just took over the rotating presidency of the 28-nation EU and will, according to Padoan, try "to help all countries to find incentives and pressure to reform" to reduce unemployment.
Padoan did not specify what reforms his country wanted to push for. Structural reforms typically include making labor markets more flexible and cutting red tape to boost competitiveness.
"We do need new momentum," Padoan told a meeting of finance ministers in Brussels. "We do need to continue with fiscal consolidation, we do need to foster growth — these are two sides of the same coin."
The comments came after weeks of discussions during which Italy urged to make more flexible the bloc's rules limiting budget deficits and debt. Germany, the Netherlands and other stronger economies oppose any changes.
In Brussels, Padoan appeared to backtrack on Italy's position somewhat. While stressing the need for reforms and reining in budgets, he added "we should not change the rules, but we should make the best use of the scope they offer."
The EU rules limit budget deficits to 3 percent of gross domestic product and overall government debt to 60 percent.
Italy's debt stands at over 130 percent of GDP and its economy, the eurozone's third-largest, is struggling with unemployment that is near a record at 12.6 percent
German Finance Minister Wolfgang Schaeuble welcomed the Italian program but insisted healing public finances, not just reforms, should remain a focus.
Dutch Finance Minister Jeroen Dijsselbloem, who also chairs the meetings of the 18-nation eurozone, said the current good conditions in bond markets allowing governments to borrow at low rates should be taken as an opportunity to slash spending and make reforms.
"The low yield levels are giving us time," he said. "But we should use that time ... let's not waste a good recovery," he said.
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