With the election season now over, Italy will have to address its sluggish growth in the coming months, said the European Commission’s Vice-President Valdis Dombrovskis
“In Italy, we have seen that growth strengthened in 2017 and it is expected to remain constant this year, but it is still very much below the European average. The debt is the second highest in the EU and productivity is low, ” said Dombrovskis.
The European Commission presented on Wednesday the European Semester winter package, setting out the EU’s economic and social priorities for the year ahead.
“There are still problems in the banking sector,” added Dombrovskis, but Italy is facing up to them, while there are still “challenges” to overcome, he added. Appearing optimistic about the formation of a government, the European Commissioner for Economic Affairs, Pierre Moscovici stressed that “We must be very confident in (Italian President Sergio) Mattarella‘s ability to discuss everything with the parties and to facilitate the formation of a stable government that I am sure will allow Italy to confirm its European commitment and its position in the heart of Europe.”
As is always the case with interim governments, the Commission recognises that “they may not have full budgetary authority”, said Dombrovskis. “We accept documents based on the scenario of constant policies”.
At present, excessive imbalances exist in Italy, including high debt and a protracted low productivity that involves risks with transnational implications, as well as impaired loans and high unemployment. Italy’s debt is being stabilised but the momentum for reforms has slowed.
Italy, however, is not alone, as Cyprus, Croatia, Bulgaria, France, Germany, Ireland, the Netherlands, Portugal, Spain, and Sweden are experiencing economic imbalances. Only Slovenia has received a positive assessment from the Commission, which suggested that the small former Yugoslav republic is no longer experiencing economic imbalances.