Brussels, 24/08/2004 (Agence Europe) - At the end of his meeting on Monday in Brussels, the Italian minister of the economy, Domenico Siniscalco, the European Commissioner for economic and monetary affairs, Joaquin Almunia declared that they were satisfied with their first meeting. The new Italian minister for the economy had just submitted the Economic and Financial Programming Document (EFPD) in which Italy's budgetary strategy has been elaborated for the next four years and on which Mr Almunia described as a realistic document whose growth forecasts are not overly optimistic. Almunia and Siniscalco said that in order to dealt with current worries such as the hike in oil prices, a coordinated response was needed by Member States.
Figures presented in the EFPD were greeted positively by Commissioner Almunia, who sees them as displaying the political will of minister Sinsicalco to move forward to a healthy budget. The Italian government first intends to keep to its commitments that enabled it to avoid having a warning over its excessive deficit in 2004. During the Ecofin Summit on 5 July, the Italian prime minister Silvio Berlusconi (who was at that time in discussions with Giulio Tremonti) also confirmed his intention to reduce taxes. This idea does not appear to have been translated into any figures, but Siniscalco assured Commissioner Almunia that any tax relief would be covered financially.
EFPD announces savings for 2005 as well as supplementary revenue equivalent to EUR 24 bn in order to balance the public budget and GDP to 2.7% and therefore to below the 3% ceiling imposed by the stability and growth pact. On these issues the two men greed to meet shortly as detailed measures have still not been unveiled in the document. In the medium term EFPD also seeks to bring the ratio between public debt and GDP to under 100% (it currently stands at 106%). This kind of orientation is not in the line of ideas for reforms mentioned by Commissioner Almunia with regard to the Stability and Growth pact (SGP) and the need to take more notice of public debt and budgetary trends when the situation is being assessed in a country. Joaquin Almunia will present his colleagues with a report on amendments to be introduced during the next meeting of the College on 3 September (On his ideas see EUROPE 25 June p 8).
Although there are still doubts regarding oil price hikes and growth prospects for 2005, Almunia and Siniscalco repeated that to deal with this "unknown", it was necessary to develop a coordinated strategy at an EU level. Almunia stated that no Member State should take unilateral measures and confirmed, therefore that any possible measure that amended tax on oil products should be discussed by finance ministers. The issue could therefore be tackled during the informal Ecofin on 10-11 September (see p 6).