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4/12/14

Italy Renzi Cuts Italy Growth Forecast, Calls for Rich to Give - by Andrew Frye and Chiara Vasarri

Italian Prime Minister Matteo Renzi cut the government’s forecast for economic growth and renewed his promise to slash benefits for top civil servants, saying the working poor are shouldering too much of the pain.

Gross domestic product will expand 0.8 percent this year, Renzi said late yesterday in a news conference in Rome after his cabinet approved his multi-year budget plan. That compares with the 1 percent growth projected in September by Renzi’s predecessor, Enrico Letta. Italy’s GDP contracted 1.9 percent last year, the second decline in a row.

Renzi, 39, has focused on the lifestyle gap between blue-collar workers in the private sector and the chauffeured civil servants running agencies and state-owned companies. With resources limited by European Union deficit limits, Renzi is counting on public spending cuts to help finance the centerpiece of his stimulus plan: tax cuts for lower-income workers.

“We have to tell the people that politicians are making sacrifices,” Renzi said. “It’s time for politicians, directors and public managers to feel the urgency.”

Read more: Renzi Cuts Italy Growth Forecast, Calls for Rich to Give - Bloomberg

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