Brussels

Italian government says rushing 1.2 billion euros in refunds

Money for businesses 'soon available' says economy minister

Italian government says rushing 1.2 billion euros in refunds

Brussels, April 8 - At least 1.2 billion euros in tax refunds to Italian businesses are being rushed through approvals, Economy Minister Vittorio Grilli said Monday. "We are working to make cash available" to businesses struggling with an ongoing economic crisis, Grilli said following meetings with the European Commission. There, he discussed Italy's new program to repay 40 billion euros in debts owed by government to private companies - a plan designed to kick-start a stagnant economy. The latest portion of value-added tax (VAT) refunds should be available quickly under "accelerated payments" aimed at quickly returning 3.7 billion euros, said Grilli. Italy's tax agency has said it will be refunding 11 billion euros in total to business. But despite such measures, economic growth will continue to stagnate so long as Italy's political scene remains chaotic, Grilli warned. "The lack of clarity on the (political) outlook does not create optimism, nor restore confidence to the citizens," Grilli told reporters. "A clear strategy of trust is important to restore confidence" in Italy's economy. Earlier, Grilli reassured the European Commission that Italy intends to honour its budget commitments under the European Union's Stability and Growth Pact, despite the 40 billion euros in debt repayments. Still, only the commission can decide the terms for Italy's exit from the pact's excessive debt provisions, Grilli added. "It will be up to the EU Commission to decide how and when (Italy) may get out of the deficit procedure," Grilli said after meeting with European Economic and Monetary Affairs Commissioner Olli Rehn. On Monday, the outgoing government of premier Mario Monti approved a plan to pay 40 billion euros owing to private firms, as a step in stimulating economic growth. Monti has insisted that the payment will not affect Italy's commitment to keeping its deficit under the threshold of 3% of GDP, as required by the European pact. (photo: Economy Minister Vittorio Grilli, left, and Premier Mario Monti)

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