(Bloomberg) – Italy's promise to achieve ambitious fiscal targets goes hand in hand with growing skepticism from the eurozone as the country entered recession at the end of last year. For some peers, achieving these goals may even require divine intervention.
"I am Catholic, so I believe in miracles, which allows me to remain calm, even with regard to Italy's ability to reach its deficit reduction target," said Slovak Finance Minister Peter Kazimir, in Brussels, on the eve of a meeting with his president. Italy is not officially on the agenda of Monday's meeting.
The populist government of Rome faces new criticisms of its economic policy after further signs of slowing have fueled speculation that further measures would be needed to spur growth and contain the deficit in the fiscal rules of the country. European Union. The latest warnings come after the European Commission reduced its growth forecast for 2019 to 0.2% from 1.2% previously, the lowest among the 19 members of the euro area.
This fall in the outlook comes two months after Rome and Brussels found a compromise on the goal of reducing the Italian deficit following protracted negotiations. The Italian government initially sought a higher target, which rocked the eurozone and contributed to making Italian bonds among the worst performers in the region last year.
"During our negotiations, the Italian authorities have substantially corrected the budget trajectory, but the damage to the economy has already been caused," said Vice President of the European Commission Valdis Dombrovskis on the eve of the Brussels meeting. "Now it is important that Italy continues to stick to responsible fiscal policies in order to allow the economy to rebound."
Italy's growth and deficit targets are causing concern as the eurozone shows signs of more general weakness. Several finance ministers have warned that countries, including Italy, should do their homework and put their finances in order, as rising data is evidence of a persistent slowdown in the bloc.
"We are concerned about many countries," said Austrian Finance Minister Hartwig Loeger on his way to the meeting. "What I consider to be the most important factor is that many countries have not taken advantage of the recovery to consolidate their budgets," he said, adding that "the most important factor is the fact that we have not been able to do this. Italy was one of them.
Dutch Finance Minister Wopke Hoekstra said it was important for countries to take steps to get their economy strong before the economic cycle. "We see that there is less growth in a number of countries and this makes it all the more important to ensure we use the time we have to balance our budgets and push forward reforms," he said. he declared.
– With the help of Joao Lima and Lyubov Pronina.
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