Commission to set economic targets


THE EUROPEAN Commission will set out its economic strategy for the euro zone today, spelling out measures to balance growth with unpopular fiscal consolidation that will be particularly pointed for Spain and Italy.

The commission will issue specific recommendations for each of the 27 European Union members, as well as for the 17 sharing the euro. Once endorsed by EU leaders in June, the executive’s plans will become binding for the 27-nation bloc.

Italy, the euro zone’s third-biggest economy and a country under close market scrutiny because of its large debt and slow growth, is likely to get praise for its fiscal consolidation efforts under technocrat prime minister Mario Monti, a draft document shows.

“The policy response to ensure sound public finances and tackle Italy’s long-standing structural weakness has been determined and wide-ranging,” reads the draft, which may be yet changed before adoption.

“Italy has been implementing a bold fiscal consolidation strategy which should allow correcting the excessive deficit by 2012 and achieving . . . a broadly balanced budgetary position in structural terms by 2013, one year earlier than recommended.”

The draft report on Italy says priority areas for Rome are its public finances, reforming labour markets, education and market regulation, as well as making taxation more growth friendly and a more efficient organisation of the judiciary. It calls on Italy to adopt laws that would implement an agreed balanced budget rule. – (Reuters)