International Monetary Fund urges debt-drowned Italy to reform its budget


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International Monetary Fund urges debt-drowned Italy to reform its budget

On Friday, the 12th of April 2019, the IMF (International Monetary Fund), accountable to foster global monetary cooperation and to secure financial stability, had urged heavily indebted Italy to slowly restructure its public finances.

Adding that a mid-term package of measures had always been crucial to recessed economies, IMF Head of Division, Paul Thomsen, responsible for Europe had been quoted saying on Washington on Friday (April 12th) that apart from the low productivity such as faltering factory activity, it was also important for the European countries to deal with a higher level of structural unemployment.

Concomitantly, the ECB President, Mario Draghi had also called on the Italian policymakers to push more for creating more jobs and securing growth. Never the less, Italy had been in a technical recession for the past couple of months, and mourning under a hoard of debts, which accounted for over 130 percent of the country’s annual economic output.

The right-wing government of Italy had been expecting a growth of only 0.2 percent in 2019, yet its budget had again set a deficit target of 2.4 percent of economic output, which would unlikely to avert another collision with European Commission, as on December 2018, after getting rejected thrice, the government of Rome had agreed to downsize its deficit target at 2.04 percent.

EU Commission had rejected a deficit target of 2.4 percent at that time, as it was too high and a similar set of disputes would likely to fire up.