Brussels, 02/05/2013 (Agence Europe) - The new Italian prime minister, Enrico Letta, said at a press conference in Brussels on Thursday 2 May with the president of the European Commission, José Manuel Barroso, that he was returning to Rome optimistic, more optimistic than when he left because Barroso will support measures to boost growth and urgent initiatives to tackle youth unemployment at the European Summit in June. Letta is hopeful that the budget consolidation measures decided by the Italian government will be deemed sufficient for allowing the country to leave the excessive deficit proceedings at the end of May. The visit was the second stage in a two-day trip to Berlin and Paris to meet the German chancellor, Angela Merkel, and the French president, François Hollande, before arriving in Brussels for meetings with Barroso, the president of the European Council, Herman Van Rompuy, the Belgian prime minister, Elio Di Rupo, and the president of the European Parliament, Martin Schultz.
In all his meetings, Enrico Letta explained that Italy intends to meet its budget commitments to the EU and outlined his government's economic programme to tackle the country's urgent economic and social needs. The detail of the measures and how they are to be paid for (particularly the shortfall in tax income due to abolition of the IMU tax on family homes demanded by Silvio Berlusconi's PDL party (see EUROPE 10837) will be communicated to the Commission over the next few days or weeks, he said, and before 29 May, when the Commission will be deciding, as part of its review of member states' economies, whether or not to end the excessive deficit proceedings against Italy that were launched in late 2009. After their talk, Barroso said that, though he had yet to see the details of the Italian measures, he was very confident that Italy would be able to exit the excessive deficit proceedings. Barroso said Italy should be able credibly to finance its new measures so as to keep its budget deficit below the 3% of GDP cut-off point by the end of 2013 and keep its structural budget deficit such that it can gradually reduce its debt, which currently stands at just under 130% of GDP.
The other big message from Letta was the need for the European Union to make an immediate commitment to stimulate growth and tackle youth unemployment. He said the latter was the most important issue for his government and it was crucial for the next European Summit, in June, rather than next year, to send out strong signals to European citizens to give them hope and confidence. This message was echoed by the president of the European Commission, who admitted that application of the Growth Pact signed by heads of state last year was “below expectations” and it would be excellent if it could be reinforced in June with an ambitious plan to tackle youth unemployment, which is an urgent social need. Barroso said that budget belt-tightening was not in contradiction to measures to boost growth and it was necessary to go beyond deficit correction measures with measures to introduce reforms, make the economy more competitive and introduce measures that can restore hope in the short term.
The other issue addressed by the two leaders ahead of the summit was the need to conclude banking union. Letta said this was “very important” in order to have capital to invest at lower interest rates to give credibility to the European project. (FG/transl.fl)