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Lights on Rome's Vida Del Corso in December 2011. AP Photo/Gregorio Borgia/PA

Italy's economy 'on the right track' - IMF

IMF official says Italy has made notable progress since Mario Monti took office.

AN INTERNATIONAL Monetary Fund official said today that the eurozone’s third-largest economy is “on the right track” and has made notable progress in the six months since Premier Mario Monti took over.

An IMF review of Italy found its reform measures have meant the country is financially more secure and the program of reform should be considered a model for Europe, Reza Moghadam, the director of the IMF’s European department, told a news conference in Rome. But he urged urgent measures to boost growth, and said Italy’s banks need to boost their capital.

“There has been remarkable progress. It is not easy to remember that Italy faced a very difficult and dangerous situation at the end of last year” Moghadam told reporters after meeting with Monti and his government of technocrats.

Monti was brought in last November to head a government of technocrats aimed at preventing Italy from succumbing to the eurozone’s debt crisis. Italy’s debt ratio is 120 per cent of GDP, or €1.9 trillion, a sum that would overwhelm the eurozone if Italy were unable to raise money from the bond markets to make payments on outstanding debt.

The IMF mission report was the second vote of international confidence for the Monti government , the day after President Barack Obama in a phone call asked Monti to open the first session at the Group of Eight meeting in Camp David.

Monti said the IMF’s report showed that Italy “has done and needed to do to put its public accounts on a safe basis and launch incisive reforms.”

While encouraged, the IMF mission concluded that Italy needs to do more to promote growth. The IMF urged accelerating plans to spin off the gas distribution network from the Eni oil company, speeding the opening of professions like accountants and pushing for more privatisations of such things as local utilities.

Labour market reforms and liberalisation of the service sector could increase Italian growth by 6 per cent, the IMF said. Labour market reforms, including measures to make it easier to fire workers as well as discouraging short-term contracts, are being debated in Parliament

“It will help to create jobs and the sooner it is implemented, the quicker that process can start,” Moghadam said.

The mission also said that Italy’s banks, which are heavily exposed to sovereign debt, need to raise their capital, by raising equity or disposing noncore assets — not by cutting loans. Moody’s ratings agency this week downgraded 26 Italian banks.

The government expects the economy to contract by 1.2 per cent this year. The Italian statistics agency this week confirmed a third straight quarter of contraction as the country’s recession deepens.

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    Mute Ross UAE
    Favourite Ross UAE
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    Dec 1st 2014, 8:30 AM

    Poor countries such as Liberia cannot afford the standard of health care provided to and paid for by rich western countries including Ireland, and so long as they are led by corrupt politicians they never will. Any aid given is mostly stolen or wasted and what remains just keeps people alive to face the next crisis which is never too far away. Without complete reform these African countries will remain at the bottom of every human development index, and that reform must come from within as many billions in foreign aid over the past 150 years has changed little except facilitate the replacement of the spear with the AK47. And yes, I have been there.

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    Mute Plantation Watch
    Favourite Plantation Watch
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    Dec 1st 2014, 8:20 AM

    What is actually being suggested in this article?

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    Mute Anne Gyna
    Favourite Anne Gyna
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    Dec 1st 2014, 1:17 PM

    Our own Irish healthcare is hardly 1st World, gold-medal standard either, is it? With all due respect, let’s get our own very ill people off trollies & hard plastic chairs in Ireland’s A&E’s first, before we fret about over-populated countries & their problems.

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    Mute Sean Mac Diarmada
    Favourite Sean Mac Diarmada
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    Dec 1st 2014, 10:16 PM

    “Healthcare medical apartheid is as unacceptable in 2014 as apartheid was ‘back in the day’ in South Africa. There can be no ‘them and us’.”
    Welcome to Ireland 2014.!

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    Mute Phil West
    Favourite Phil West
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    Dec 1st 2014, 10:54 AM

    Healthcare apartheid – welcome to Ireland

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    Mute Tim Stephen Hendy
    Favourite Tim Stephen Hendy
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    Dec 2nd 2014, 2:55 PM

    I’m not seeing where “apartheid” comes into it, except as an odd attempt to draw attention to something by using the word.

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