Monti sees no more budget cuts

MILAN - Agence France-Presse

Mario Monti. AFP photo

Italy will not need any more austerity budget cuts even if its current recession lasts, Prime Minister Mario Monti told Italian finance chiefs in a speech in Milan yesterday.

“If the recessions lasts, if the real economy does not improve... there will be no need for a new plan since safety margins have been included” in the latest austerity budget approved in December, Monti said.

Italy is aiming to restore a balanced public budget by 2013.

“We have been prudent,” Monti said, adding that that growth figures incorporated into this plan were “very modest” and borrowing costs were “very high” even though the jitters regarding financial markets have since dissipated.

Monti said there would also be extra revenue flowing into state coffers from a crackdown on tax evasion which had not been included in the budget.

The government is forecasting that the economy will shrink 0.4 percent this year.