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Italian PM Renzi lashes out at German trade surplus

Italy Prime Minister M. Renzi has urged Germany to do its homework and start reducing what he calls its excessive trade surplus. He suggested it was at least partly behind the problems the Italian economy was facing.

Answering questions about Italy's controversial 2017 budget law on the sidelines of an EU meeting in Brussels, Italian Prime Minister Matteo Renzi said Germany had many problems, including a large trade surplus which he said violated European Union fiscal rules.

"I think that Germany's balance sheet is problematic, starting from a trade surplus, which does not respect our rules, and I hope, think and expect that our German friends can finally proceed with rebalancing this," Renzi said.

Observers on the ground saw his attack as an attempt to deflect questions on Italy's own budget after his government presented a 2017 draft foreseeing higher deficits and debt compared with what had previously been agreed with EU institutions.

Under the plan, the budget is to widen next year's fiscal deficit target to 2.3 percent of GDP, up from the 1.8 percent goal that the government had originally pledged.

Brussels worried

The European Commission is concerned about Italy's public debt, which at 133 percent of gross domestic product is the largest in the 28-member EU behind Greece.

Watch video 05:01

Workers propping up their companies in Italy

Matteo Renzi said in Brussels he ruled out more belt-tightening to accommodate demands that may come from the EU executive, which is considering sending Rome a warning letter.

"We want to address the needs of Italian citizens, not Brussels technocracy," he quipped.

Renzi has packed the 2017 budget package with a couple of potentially vote-winning measures as he faces a December 4 referendum on constitutional reforms that might end his career.

Among the proposed measures is a move to abolish an unpopular state tax collection agency, a pension hike, and an offer to grant amnesty to tax dodgers who declare cash previously hidden from the authorities.

hg/nz (dpa, Reuters)

 

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