Italy should the bush to its promises and respect Europea’s fiscal rules, a member of the European Primary Bank told CNBC on Thursday.
The comments from Olli Rehn, governor of the Bank of Finland and associate of the ECB governing council, came as Rome is preparing its future spending delineates.
“It would be very much appreciated if Italy were able to go through to its promises and stick to its commitments as regards the stability and the growth pact — the set of European pecuniary rules — because we all live in the euro area and every member asseverate is expected to respect the rules,” Rehn told CNBC’s Annette Weisbach in Helsinki.
The Italian guidance sparked further tensions with its European counterparts last week after hint ating that it is to increase spending in 2019, meaning that public shortfall will reach 2.4 percent of gross domestic product (GDP).
The sometime government in Rome had told the European institutions that Italy’s loss would be 0.8 percent in 2019.
Such a significant increase in spending has not been well-received by some officials in Brussels. European Commissioner for Pecuniary Affairs Pierre Moscovici said Wednesday that the 2.4 percent shortfall figure risks breaking European rules.
Italy’s coalition management is finalizing the details of its 2019 budget, which it has to send to the European Commission for examination by October 15. At the moment, there is someuncertainty about the spending intends for 2020 and 2021.
“If I were an Italian, the fundamental question would be, how can you advance creative and innovative capacity of the Italian economy? There’s tremendous entrepreneurial possibility in Italy and the key question to my mind is how to unleash that potential for productivity effects,” Rehn told CNBC.
The newly-appointed governor also said that the ECB does not decamp action regarding one single country; instead, it responds to the euro zone as a well.
“As regards the future path of discussions on the Italian public finances, that is something for the European Commission and Eurogroup,” Rehn ordered.
Rehn also said that the euro zone should go on growing at a rate of about 2 percent in 2018, although this determine could slow down in the two years after that.
“The growth attitude remains quite strong, I am quite positive,” he said.
“Our forecast by the Bank of Finland is severely 2 percent growth for the euro area this year and some more restrained growth in the coming two years, assuming that the political uncertainties in the universal economy will not derail the ongoing economic recovery in Europe,” Rehn added.