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Roundup: Italian cabinet approves 2015-2018 economic plan

Xinhua, April 11, 2015 Adjust font size:

The Italian cabinet on Friday approved a three-year Economic and Financial Document (DEF) that provides new official estimates on growth and public finances as well as economic guidelines for the 2015-2018 period.

The cabinet confirmed the macro-economic estimates that Prime Minister Matteo Renzi and Economy Minister Pier Carlo Padoan had anticipated earlier this week.

According to the new forecast, Italy's gross domestic product (GDP) would grow by 0.7 percent in 2015, up from the 0.6 percent predicted in autumn last year.

The country's GDP is expected to grow by 1.4 percent and 1.5 percent in 2016 and 2017 respectively.

The budget deficit will be kept at 2.6 percent of GDP in line with a target set in October, and will decrease to 1.8 percent in 2016 and 0.8 percent in 2017.

The debt-to-GDP ratio will stabilize at 132.5 percent in 2015, and gradually decline to 123.4 percent in 2018, Padoan said on Tuesday.

Renzi confirmed there would be no new taxes or further cuts to local or regional spending in 2015.

"This is a crucial point for our country, since citizens have no need to endure further sacrifices," Renzi told a press conference after the cabinet meeting.

Some 1.6 billion euros (1.7 billion U.S. dollars) in extra funding was freed up from measures envisaged in the DEF, and the cabinet would decide whether to allocate such additional resources in the coming weeks according to the country's priorities, Renzi explained.

The Italian cabinet also pledged in the DEF to avoid triggering the so-called "safeguard clause" in 2016, which would bring about an increase of value-added and other indirect taxes in case the spending-review process proved inadequate to guarantee the budgetary goals, according to European Union (EU) rules.

To do so, the government counts on already planned spending cuts worth some 10 billion euros (10.6 billion dollars), which are due to take effect next year, the minister said.

The DEF approved on Friday also includes a National Reforms Program that outlines the progress of all reforms being implemented or planned up to 2020, in line with EU recommendations.

The implementation of such a program would be a key issue for Italy, since the country "intends to make use of the flexibility of public finances related to the use of the clause on European reforms, in order to assist the economic recovery," the cabinet wrote in the DEF.

The three-year blueprint has to be endorsed by the parliament, and the Lower House will start discussing it on April 23, according Reforms Minister Maria Elena Boschi.

It also needs to be presented to the EU Commission by the end of April as required of all national budgetary plans, in order for the authorities in Brussels to coordinate the economic and financial policies of EU members.

Also on Friday, the cabinet appointed former Deputy Minister for Economic Development Claudio De Vincenti as a new undersecretary to the prime minister.

Vincenti replaced Graziano Del Rio, who was named new transport and infrastructure minister this week after Maurizio Lupi quit over an alleged corruption scandal involving the ministry. Endi