Italy under pressure to push through reform plans
Italy will this evening come under renewed pressure to clarify how it intends to implement economic reforms to reduce its debt.
A spokesman for Olli Rehn, the European commissioner for economic and monetary affairs, said a meeting of eurozone finance ministers this evening would be addressed by Giulio Tremonti, Italy’s finance minister, on “how and when” the Italian government plans to implement a list of commitments.
The Italian government has been sent a questionnaire by the European Commission asking for details of its plans for fiscal and structural reforms to ease financial-market concerns over debt levels. “The aim of this exercise is to provide clarity, it is not just a list of commitments,” said a spokesman for Rehn.
He said the Commission would this week send a monitoring team to Rome to assess the progress made. The Commission team will work independently from a similar team being sent by the International Monetary Fund (IMF). The Commission’s monitoring team is to report back by the end of November.
The spokesman said he hoped that today’s meeting and reports from the monitoring team would help clarify the situation in Italy.
The stability of Italy’s centre-right coalition government under Silvio Berlusconi, the prime minister, is in doubt after several MPs quit the coalition over the failure to get agreement on reforms asked for by the EU and the IMF.
The country’s borrowing rates reached new highs earlier today, over fears that the government will be unable to avoid an international bail-out. Yields on Italian ten-year government bonds rose to 6.58% in trading on Monday (7 November). A level close to 7% is considered unsustainable.
Berlusconi said yesterday (6 November) that he still commanded enough support to get the necessary reforms passed by the Italian parliament and prevent Italy suffering a Greek-style debt crisis. His reform plans include scrapping tax breaks for the rich, raising the retirement age from 65 to 67, selling government assets and making it easier for companies to fire employees.
Berlusconi has planned to test his support by holding a confidence vote on Tuesday to approve the country’s 2010 budget accounts. If the government falls, there would likely be a national unity government or fresh elections.