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Italy must cut wasteful spending, prioritise investment, says EU’s Moscovici

Staff Writer |
Italy needs to cut wasteful spending and prioritise investment and infrastructure spending that will help stimulate growth and productivity, European economics affairs commissioner Pierre Moscovici said on Thursday.

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“It’s in Italy’s interest to reduce its very high public debt,” Moscovici said, speaking at a European Commission event in Paris.

“It would be a lie to think one can invest more with a higher deficit. If that happens, you end up with more debt and less capacity to invest.”

Italy is preparing its 2019 budget, a process that has heightened tensions within the governing coalition’s far-right League party and the anti-establishment 5-Star Movement.

Yields on Italian bonds have risen sharply, reflecting investor concerns about the stability of Italy’s finances.

Moscovici waded into the debate, saying it was critical for Rome to come up with a workable budget.

“The Italian budget needs to be credible, credible at a nominal level but also credible in terms of the structural reforms that are required,” he said. “There needs to be a significant effort on the structural side.”

Moscovici added that he was working closely with Italy’s finance minister in what he described as a “constructive climate” and said he hoped that would continue.

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