BRUSSELS (Reuters) - Italy needs to take necessary measures to reduce its debt but it is impossible for now to demand more from the country given its current political instability, Eurogroup President Jeroen Dijsselbloem said on Monday.
The Eurogroup said in a statement on the budgets of euro zone countries that Italy would need “significant additional measures” to rein in its budget by 0.6 percent of GDP as required under EU budget rules.
The Eurogroup said it invited Italy to take the “necessary steps” to ensure its 2017 budget complied with EU rules. Italy’s high level of debt was a matter of concern and it should step up its privatization efforts, the Eurogroup said.
However, Dijsselbloem conceded at a news conference that the group could not ask Rome to commit to additional measures after Italian Prime Minister Matteo Renzi said he would resign after his government lost a constitutional referendum on Sunday.
Dijsselbloem said he spoke to Italian Finance Minister Pier Carlo Padoan, who was not present at the Eurogroup meeting. Some of the other ministers present were asked by their peers to take further measures to rein in their budgets.
“We agreed that at this juncture it’s difficult for the Italian government to commit now to take additional measures. Therefore the Eurogroup invites Italy to take necessary steps in the near future to ensure that the budget will be compliant,” Dijsselbloem said.
“Where other ministers in the room committed to take extra measures where necessary, this was impossible to ask our Italian colleague.”
Reporting By Philip Blenkinsop and Francesco Guarascio; Editing by Alastair Macdonald