Following a meeting with the President-elect of the European Commission Ursula von der Leyen, Italian premier Minister Giuseppe Conte asked for fiscal space to restart the Italian economy.
Addressing the press, Conte said that the objective remains to subdue the debt, but insisted that the priority must be “growth and investments,” prioritizing the green economy, digitalisation and the relaunch of its impoverished of the Italian south.
This was Conte’s first visit as prime minister of his second cabinet, backed by the 5-Star Movement (MS5) and the Democratic Party (PD).
Meanwhile, the urgency of economic growth dominated German political discourse. A report by the Kiel Institute for the World Economy (IfW) published on Wednesday projects negative growth of minus 0.3% in the third quarter, as the German economy officially enters a recession. Overall, IfW expects the German economy to grow by merely 0,4% in 2019 and 0,9% in 2020.
The manufacturing sector that drives the German economy, especially the automotive industry, is expected to feel the brunt of the Sino-American trade war and could be threatened further by US tariffs and the prospect of a no-deal Brexit. In any event, declining business confidence is already hurting business confidence and investment in capital goods, to the detriment of German exports.
Finance Minister Olaf Scholz told lawmakers on Tuesday that Germany was ready to pump “many, many billions of euros” into its economy to face the current economic slowdown by boosting domestic demand.