Italy government party wants slower austerity
ROME, May 7 — Italy should respond to Francois Hollande’s victory in France’s presidential election by easing austerity, raising deficit goals and delaying approval of new EU rules on public finances, the economic spokesman for a major ruling party said today.
Stefano Fassina, economic spokesman for the centre-left PD, one of the two parties which technocrat Prime Minister Mario Monti depends on for his majority, told La Stampa daily that Hollande’s victory marked an opportunity for Italy to end “mistaken economic policy choices”.
Monti should now “delay parliamentary approval of the EU fiscal compact (on tougher budgetary rules) and at the same time slow the process towards deficit reduction”, Fassina said, calling for a sharp increase in public investment.
Hollande has pledge to swing policy away from simple austerity to growth. More than half the vote in Greece in yesterday’s election also went to anti-austerity parties.
Only last month, Monti delayed by one year the goal of balancing the budget in 2013 which his predecessor Silvio Berlusconi agreed with Italy’s partners last summer.
Fassina, one of the more leftist members of the PD, is responsible for the party’s official line on economic policy, though his views may not be shared by some of the party’s more centrist members.
Hollande’s victory marked “a defeat for the blind austerity advocated by the European Central Bank which is dragging everyone down, and so we must go in the opposite direction, the one that can save us from a shipwreck,” Fassina said.
The PD forced Monti to compromise on his original labour market reform proposal which is still before parliament, insisting that he modify a plan to ease firing restrictions.
Monti, however, has been among the forefront of European leaders saying that growth policies much not be forgotten in the drive for austerity. — Reuters