Italy fails to get finance ministers agreement for more flexible European rules on austerity

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Italy – taking over the European Union presidency – has been given the cold shoulder by EU finance ministers who rejected Rome’s calls for a softer approach to spending reforms.

Italian Prime Minister Mateo Renzi wants less focus on austerity and more on encouraging growth.

Which left the Italian Finance Minister Pier Carlo Padoan making an awkward argument, pushing “incentives” to reform.

He told reporters: “We are delivering our structural reforms in Italy and my purpose as chair of the European Union Presidency for this semester is to help all countries to find incentives and pressure to reform. We all need to have a reform agenda.”

To get Europe out of the current economic situation of high unemployment and weak growth, Italy wants government money spent on broadband networks to be stripped out of the calculation of public deficits and has hinted the same should apply to public investments on schools and road and rail infrastructure.

That idea didn’t find favour, particularly with Germany which said that structural reforms were no alternative to reining in excess spending.

Italy might be in the chair, but majority rule means no change in direction of economic policy.

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