OECD praises Italy as among states getting books in order

Key to sustainability is 'credible structural reforms'

OECD praises Italy as among states getting books in order

Paris, November 21 - Italy has been praised as one of the OECD countries that is making a serious effort to improve its public finances, through measures valued at about 6% of gross domestic product (GDP), the organization said Wednesday. In response to the global economic crisis, many countries have announced measures aimed at reducing debt and deficits, which are worth more than 3% of their GDP over the period 2009 to 2015, according to the OECD's report: Restoring Public Finances 2012. However, Italy is among the countries that are taking concrete steps it says will help to restore stability to public funds. Italy's efforts includes reducing spending through job and wage cuts as well as trimming education, health, and infrastructure budgets. Some critics say too much cutting and not enough investment can cause an economy to stagnate or even contract. "Finding the right balance between consolidating budgets and stimulating growth is a challenge for all governments," said OECD Secretary General, Angel Gurria. "While there is an indisputable need for medium-term fiscal consolidation, austerity alone is unlikely to achieve its goal. "The key to sustainability is credible structural reforms that strengthen public finances, promote long-term economic growth and support those who are hardest hit by the crisis". The report also notes that Greece, Ireland and Portugal have announced fiscal consolidation packages totalling more than 12% of GDP in cumulative terms from 2009-2015.

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