Cyprus Mail

New Italian economy minister vows to stay in euro

Economy Minister Giovanni Tria

Italy’s new government has no intention of leaving the euro and plans to focus on cutting debt levels, Economy Minister Giovanni Tria said on Sunday, looking to reassure nervous markets.

In his first interview since taking office a week ago, Tria told Corriere della Sera newspaper that the coalition wanted to boost growth through investment and structural reforms rather than via deficit spending.

“Our goal is (to lift) growth and employment. But we do not plan on reviving growth through deficit spending,” Tria said, adding that he would present new economic forecasts and government goals in September.

“These will be fully coherent with the objective of continuing on the path of lowering the debt/GDP ratio,” he said, confirming that he aimed to meet existing 2018 and 2019 debt reduction targets.

Italian government bonds have come under concerted selling pressure in recent weeks on fears the new government will embark on a spending splurge that it can ill-afford. Investors also worry that euro-sceptics within the administration might look to push heavily indebted Italy out of the eurozone.

Tria, a little-known economics professor who is not affiliated to any party, said the coalition was committed to remaining within the single currency.

“The position of the government is clear and unanimous. There is no question of leaving the euro,” he said.

“The government is determined to prevent in any way the market conditions that would lead to an exit materializing. It’s not just that we do not want to leave, we will act in such a way that the conditions do not get anywhere near to a position where they might challenge our presence in the euro.”

The coalition is made up of the anti-establishment 5-Star Movement and far-right League. Both parties have called in the past for Italy to leave the euro and they initially nominated as economy minister a man who had called Italy’s entry into the single currency an “historic error”.

The nomination of Paolo Savona was eventually withdrawn under pressure from President Sergio Mattarella, but he was appointed instead to the position of European Affairs Minister.

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