Brussels

Rehn 'trusts' Italy to meet deficit target

ECB warned Thursday might overshoot

Rehn 'trusts' Italy to meet deficit target

Brussels, September 13 - European Economic and Monetary Affairs Commissioner Olli Rehn said Friday the European commission was "confident" that the Italian government would respect its commitment to keep its deficit-to-GDP ratio at or under 3%. He noted that Premier Enrico Letta and Economy Minister Fabrizio Saccomanni had repeatedly pledged to meet the target. "We trust Italy to keep that commitment," he said. Rehn reiterated that the eurozone economy was at a "turning point" but the crisis "is not over". Rehn's statement came a day after the European Central Bank said there was a risk Italy would not achieve its deficit target for this year. The ECB said in its monthly bulletin that moves to pay public-sector debts to private companies and the rolling back of the IMU property tax could affect Rome's ability to keep the deficit-GDP ratio at or under 3%. The central bank also mentioned the decision to postpone a planned 1% rise in the top band of value-added tax (VAT), a hike Premier Enrico Letta's government is hoping to avoid completely. The European Commission closed an excessive-deficit procedure against Italy in May after its deficit came in at 3% last year and the government said it would be 2.9% this year. Last week the Italian government revised its deficit-to-GDP ratio forecast for this year up from 2.9% to 3% following the decision to scrap IMU. The EU does not allow member States to have a deficit of over 3%.

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