Italy on Debt Reduction Path

Italy will try to reduce debt to preserve investors’ confidence in the highly indebted country, as the outlook for economic growth starts to slip, Economy Minister Giovanni Tria said on Tuesday, Reuters reported. Speaking in the lower house of parliament, Tria said “the confidence of financial markets is necessary” for Italy, whose debt amounts to around 1.3 times it annual economic output. In the interest of the country, it is the intention of the government to act to prevent any worsening of the public accounts,” he told lawmakers. “We must stay on the debt reduction path and above all we must avoid increasing debt to finance current spending.” Output in the second quarter was similar to the first, Tria said, adding that the outlook for growth and, as a consequence, public accounts, was less favorable now than it had been a few months ago. Tria’s comments have calmed markets but it is too soon to declare Italy crisis are over just yet. Market pressure is likely to return in September when the government publishes its budget proposal.