Deficit/GDP ratio improves to 3% in 2012

Italy hits EU-mandated target

Deficit/GDP ratio improves to 3% in 2012

Rome, April 5 - Italy's debt-to-GDP ratio, an important parameter in its European Union budget obligations, fell 0.7% to 3.0% in 2012, exactly the limit set by the EU's Stability and Growth Pact (SGP), Istat said Friday. The ratio would have been even lower, 2.9%, without derivatives swap operations, the statistics agency said. The outgoing government, led by caretaker Premier Mario Monti, recently raised its deficit target for 2013 to 2.9% of gross domestic product - a dramatic increase from its earlier target of 1.8%. Monti called European Economic and Monetary Affairs Commissioner Olli Rehn Wednesday to assure the European Commission that Italy will honour its budget commitments under the SGP. Monti told Rehn that Italy's plan to pay 40 billion euros of public-sector debt to private firms, to be examined by cabinet Saturday, will not affect its commitment to keeping its deficit for this year under the threshold of 3% of GDP. Rehn asked Monti for "full details" of the debt pay-back plan, which was to be approved by the cabinet this week. It will now be approved by Monday at the latest, sources said, because of the need for further discussions in the wake of disagreements in parliament.

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