Rome

Govt working for growth, but has no magic wand, says Grilli

Economy minister accepts recession could hit deficit targets

Govt working for growth, but has no magic wand, says Grilli

(ANSA) - Rome, October 3 - The government is working to pull Italy out of the recession and boost growth but it does not have a magic wand, Economy Minister Vittorio Grilli told parliament on Wednesday. Premier Mario Monti's emergency technocrat government has passed a series of structural economic reforms that should boost growth in the long term. The IMF has said the reforms will add 4% to the country's GDP over the next 10 years. But the government has also approved austerity measures, including several tax hikes that have further raised Italy's already high tax burden. These were aimed at cutting the budget deficit but they have also contributed to deepening the recession that started last year. "The ongoing situation of crisis demands a strong commitment from the government to give concrete responses to the urgent need to revive the economy, not just in the medium and long term, but also in the short term," Grilli said. He said the government was aware of the risk that the austerity measures would fail to hit their target of eliminating Italy's deficit next year if the recession continues to hit public revenues. He also said he agreed with the recent assessment of the Audit Court, which said the current tax burden is unsustainable, and recognised that it is necessary to "give back a more balanced setting to economic policy". But he also stressed that: "growth is a magic word and everyone would like for there to be a magic wand too, but there isn't".

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