Italy unveils ‘New Deal’

On 12 June, Italy, in its capacity as holder of the EU’s next Presidency, unveiled a bold “European Action Plan for Growth”.

The plan aims to revive the EU Member States' beleaguered economies through a massive programme of public investment, especially in large European transport networks. The plan, drawn up and presented by Italian Finance Minister Giulio Tremonti, includes a series of major public works projects whose aim is to boost European investment by 0.5 per cent to 1 per cent a year until 2010. The 50-70 billion euro plan is to be financed partly by the European Investment Bank. The EIB would provide loan packages whose repayment period could be 35 years.

The plan, which will be submitted to the EU's finance ministers and which could receive tentative endorsement at next week's Thessaloniki Summit, would not have an adverse effect on the EU's finances and is "entirely compatible" with the terms of the Stability and Growth Pact, Mr Tremonti said. Germany, France and Italy are facing tough restrictions on public spending to stay within the 3 per cent of GDP deficit limit set by the Stability Pact.

 

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