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Italy doesn't have room for expansive fiscal measures as economic growth is close to zero amid the slowdown in Germany, the nation's finance chief said.
"Italy has been growing in the last 10 years by 1 percentage point less than its European peers, and we are going close to zero as Germany will post a 0.7-0.8 percent increase" this year, Finance Minister Giovanni Tria said on Sunday at an economic gathering in Florence. "It would be absurd to implement restrictive measures; for sure we don't have space for any expansive fiscal measures," he said in a speech shown on Sky TG 24.
Italy's debt amounts to 132.1 percent of economic output, the second-highest level in the euro region, after Greece. In December, the populist government in Rome reached a deal with the European Commission for this year's budget, after revising down the deficit target and the forecast for economic growth. Since then, data showed that the nation entered a technical recession after contracting for two straight quarters.
Italy is suffering as its exporters are being hurt by Germany's slowdown, the minister said, adding that no one is asking Italy for any budget adjustments. Tria also said Italy's banking system is solid, while other European banks, especially the German ones, have problems to solve with "toxic" assets, Ansa reported. He added that any attack on the Italian banking system goes against the national interest.
Last month, the Brussels-based Commission issued a warning to Italy, saying the country's massive public debt and its long-lasting productivity weakness are risks for other countries in the region.
To contact the reporter on this story: Tommaso Ebhardt in Milan at tebhardt@bloomberg.net
To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Tommaso Ebhardt, James Amott
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