Rome

Berlusconi dares Letta govt to defy EU budget rules

Says someone should have courage to confront Brussels

Berlusconi dares Letta govt to defy EU budget rules

(By Paul Virgo) Rome, June 17 - Silvio Berlusconi said Monday that Premier Enrico Letta's government should not be afraid to defy the European Union's budget rules. "The government should go to the EU and say you can forget the 3% (deficit-to-GDP ratio) limit and the fiscal compact," said the three-time Italian premier, whose centre-right People of Freedom (PdL) party helps sustain Letta's left-right executive. "If you want to kick us out of the single currency, do so. "But remember that we pay in 18 billion euros and you only give us back 10. "Someone should go to Brussels and have the courage to say that it is necessary to sort things out". Berlusconi campaigned hard against the European-mandated austerity adopted by former premier Mario Monti's emergency technocrat government in the run-up to February's general election, in which the PdL came a close second to Letta's centre-left Democratic Party and prevented it from having a working majority in parliament. However, Berlusconi himself made budget pledges to the EU, which Monti was subsequently obliged to implement, during his third stint as premier, which started in May 2008 and ended in November 2011 when the media magnate resigned with Italy's debt crisis in danger of spiralling out of control. Sources at Letta's office said recession-hit Italy's position on abiding by EU rules remained "the same" after Berlusconi's comments. European Economic and Monetary Affairs Commissioner Olli Rehn responded in the European Parliament. "Ensuring the deficit remains under 3% and conducting the requested reforms is the key for Italy's recovery," Rehn said. Earlier on Monday Italian Economy Minister Fabrizio Saccomanni said Rome remained committed to respecting its budget pledges to the EU and cutting its deficit even as it focuses on a growing unemployment crisis. "The effort of restoring health to the State budget remains one of the priorities of the government's work," Saccomanni said. "The commitment to fiscal consolidation must not be slowed down and the public's contribution is essential in order to be successful". Unemployment in Italy recently hit a record high of 12%, with around four of of 10 young people aged 15 to 24 out of work. The economy minister added that it would only be possible to bring down Italy's high tax burden if cuts are made to public spending. "We have to conciliate limiting spending, which is essential to be able to reduce the tax burden, with the production of high-quality public services," he said. Last month the European Commission recommended that an excessive-deficit procedure opened in 2009 against Italy be closed. Rome has forecast that Italy's deficit-GDP ratio will be 2.9% this year and coming in at 3% in 2012 after Monti's emergency government passed big tax increases and spending cuts. But the austerity measures deepened the country's longest recession in over 20 years and and did not stop the country's public debt-to-GDP ratio climbing - it is forecast to hit 132% this year.

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