Italy to respect EU budget rules: FinMin

MILAN, Italy, Sept. 12 (Xinhua) -- Italy's finance minister Pier Carlo Padoan on Friday assured that his country's deficit would remain below the European Union (EU) limit of 3 percent of gross domestic product (GDP).
Padoan, who took part in a meeting of the Eurogroup finance ministers in Milan, acknowledged that Italy's target of bringing its deficit-to-GDP ratio down to 2.6 percent this year was based on a more positive economic picture of the country from six months ago.
"Now the macroeconomic scenario is much worse," Padoan said.
Italy, however, will "respect its obligations", he stressed, responding to the European Central Bank (ECB) which warned on Thursday that the Mediterranean country risked missing its target.
The Eurogroup, the main forum for the management of the single currency area, focused on supporting growth in Europe through structural reforms that Eurogroup President Jeroen Dijsselbloem said require "political courage and perseverance."
Reducing the tax burden on labor, a clear impediment to an efficient functioning of eurozone labor markets, has become a "clear policy priority," he told a press conference at the end of the meeting.
ECB President Mario Draghi told the meeting "more ambitious structural reforms" are crucial to stimulate investment in Europe.
The effect of monetary policy, he said, is greater if supported by "policies that promote potential growth and instill confidence."
The level of business investment in the eurozone has only slightly improved since the outbreak of the financial crisis in 2007, and in his view there will be no sustainable recovery if the EU fails to boost investment besides fiscal and monetary stimulus.
German Finance Minister Wolfgang Schaeuble agreed there is "an economic environment that requires a strengthening of investment in Europe, Germany included."
He stressed on the sidelines of the Eurogroup meeting that more investment, respect of fiscal rules and better regulatory frame are necessary elements to achieve sustainable growth.
An informal Ecofin meeting of the European finance ministers will be held in Milan on Saturday, following the Eurogroup meeting and the meeting of European and Asian finance ministers also held on Friday.