PARIS (MNI) – The Italian government is proposing to introduce the
principle of a balanced budget to the country’s constitution, according
to a statement issued Thursday by the Ministry of the Economy in Rome.
The statement said the “principle of budget balance” will be
introduced in the first part of the constitution of the Republic of
Italy in a section devoted to “rights and duties of citizens,” the
ministry said. “Consequently, a balanced budget will be not only an
accounting principle but a principle of extremely high political and
civil importance.”
The Economy Minister Giulio Tremonti urged that there be a
“constructive and rapid discussion in parliament,” which he said was “in
the interest of the country.”
The ministry statement gave no specific targets or timeframe.
Italy’s sovereign debt has been under attack in recent weeks and
defended by repeated interventions of the European Central Bank in
secondary bond markets. The government is trying to regain the
confidence of investors. After halting efforts to construct a E45.5
billion deficit-cutting program, the government finally has produced a
package of measures that it is shepherding through parliament this week.
Late last month, Spain announced its two major political parties
had agreed on a balanced budget amendment to the constitution, with a
separate law that would require annual deficits be reduced to no more
than 0.4% of GDP by 2020.
In France, the government of Nicolas Sarkozy is also pushing for a
balanced budget amendment and has stepped up rhetoric on the issue in
recent weeks, after French bonds came under attack by investors last
month.
–Paris newsroom, +331-42-71-55-40; bwolfson@marketnews.com
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