New Italian PM Renzi calls EU's Stability Pact 'a stupidity pact'
Published on Mar 14, 2014 9:38 PM
ROME (AFP) - New Italian Prime Minister Matteo Renzi has branded the Stability Pact rules for euro zone economies "a stupidity pact". In comments that will have raised eyebrows in Brussels and Berlin, Mr Renzi defended his centre-left government's efforts to stimulate a stagnant economy with demand-led measures that will push Italy's budget deficit.
The deficit is currently forecast by the European Commission to fall to 2.6 per cent of gross domestic product by the end of this year. Mr Renzi calculates that his measures will push it up towards the 3 per cent ceiling permitted under the Stability Pact.
Mr Renzi, who has also vowed to shake up the labour market, made it clear he would like to be able to ignore the 3 per cent ceiling and spend his way out of the long and severe recession Italy has only just edged out of.
"We can't spend money because of the Stability Pact, which is a stupidity pact," Mr Renzi said during a late-night discussion programme on Italy's public broadcaster Rai Uno on Thursday. "I am the prime minister of a country which respects the commitments made to Europe but there is an even bigger issue: what is Europe's purpose? It is not to be a soulless collection of technocrats."
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