Brussels

Van Rompuy praises Italy's 'impressive' reforms

Moves will help country in long term, says Council President

Van Rompuy praises Italy's 'impressive' reforms

(ANSA) - Brussels, September 5 - Italy has undertaken positive reforms that will help its economy in the long run, European Council President Herman Van Rompuy said Wednesday. Speaking to a gathering of European Union diplomats, Van Rompuy praised Italy and said that among countries at the centre of the eurozone debt crisis, Italy in particular, "has adopted a series of impressive structural reforms." Structural reforms involve significant reforms to the fundamental structure of an economy and therefore have longer-term effects. Other countries are also "going in the right direction," he added. Unfortunately, financial markets do not recognize the efforts being made as borrowing costs for some, as shown in the high spread in bond yields. "The spread levels of some countries is not always justified by the fundamentals (of their economies)," Van Rompuy said. On Tuesday the Bank of Italy said the spread between 10-year Italian bonds and the German benchmark should be around 200 basis points, rather than its current level, which is over 400. The central bank said the reason it was so high was not down to fundamental weaknesses of the Italian economy but "contagion" from the eurozone crisis.

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