OECD praises Italy reforms, says recession may end in 2013

Reducing debt should be priority, reforms must be implemented

OECD praises Italy reforms, says recession may end in 2013

(see related stories) Rome, May 2 - The OECD on Thursday praised the "ambitious programme of reforms" Italy launched last year and said the country could emerge from its longest recession in two decades later in 2013. The OECD said in a report that the reforms "have reduced the risks of economic slowdown and could help Italy emerge from the recession in 2013". But it also warned that new Premier Enrico Letta's government must implement reforms aimed at boosting growth - including controversial measures to make the labour market more flexible - that were introduced by the emergency technocrat administration of his predecessor Mario Monti. "Key 2012 reforms aimed at improving the dynamism of labour and product markets must be implemented effectively," read a summary. "This will improve Italy's persistently weak productivity and boost the country's international competitiveness". It added that Letta's government should continue with Monti's efforts to restore health to Italy's public finances. "Maintaining fiscal consolidation is key to putting Italy's debt-to-GDP ratio on a downward path over the medium term," added the summary. "Budgetary measures should concentrate on permanent spending cuts to avoid (increasing) already high levels of taxation".

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