EU’S Rehn calls Italian austerity package ‘ambitious’

BRUSSELS (Reuters): The European Union’s Economic and Monetary Affairs Commissioner Olli Rehn said on Sunday that Italy’s new austerity package was “timely and ambitious” and should help Rome achieve a balanced budget in 2013.

 Prime Minister Mario Monti unveiled a 30-billion-euro ($40.3 billion) package of austerity measures on Sunday, raising taxes and increasing the pension age in a drive to shore up Italy’s strained finances and stave off a crisis that threatens to overwhelm the euro zone.

 “I welcome the adoption of the significant package of budgetary and economic policy measures by the Italian government,” Rehn said in a statement.

 “The Commission will carry out a detailed assessment of the new package once we have received all the details. But overall this set of measures is timely and ambitious, as it gives a much needed signal of a new approach to economic policy-making,” he said.

 Rehn said the new fiscal measures should help Italy meet its target of a balanced budget in 2013.

 This was essential, he said, “to reinforce the credibility on the Italian economy, but also to regain control on the very high debt and alleviate the burden on future generations of Italians.” Rehn also said Italy would have to continue economic reforms.

 “The low growth potential of the Italian economy cannot be corrected overnight, but the measures announced today will help (by) removing some bottlenecks to growth. More is needed along the lines that I indicated ... (on) Nov. 29.”