Brussels, 20/09/2011 (Agence Europe) - The European Commission says that the new legislation that Italy passed in the summer will enable it to rectify its public finance and encourage growth. This follows the downgrading of Italy's long-term debt from A+ to A by credit rating agency Standard & Poor's (see EUROPE 10447). On Tuesday 20 September, EU Economic and Monetary Affairs Commissioner Olli Rehn said that Italy had taken the measures needed to meet the targets it has set. He said the aim of reaching a balanced budget by 2014 was more ambitious than recommended to the country by the European Council in June this year. With regard to S&P's criticism about the impact of the austerity measures and how they would dampen growth, he said that the Commission believed that budget consolidation was a prerequisite for sustainable growth. The downgrading of Italy's debt will increase the cost of rolling over the debt, and the government is reported to have cut its growth forecasts for 2011 from 1.1% to 0.7%. Italy's public debt stands at nearly €2 trillion, nearly 120% of GDP. (MB/transl.fl)