Italian FinMin Says Europe is At Fork in the Road

Italy’s finance minister has warned that time is running out for Europe’s tottering economies to avoid stagnation.

Speaking on the eve of a national strike in Italy and after figures showed the country’s industrial production fell yet again in October, he said: “There isn’t much time. Europe is at a fork in the road. One path leads to stagnation; the other to growth that we sorely need.”

In a frank interview with the Guardian and other European news organisations, Pier Carlo Padoan attacked the European Investment Bank (EIB) for worrying more about its credit rating than about promoting growth and revealed he had been discussing with Brussels new rules to encourage government spending that underpinned structural reform.

On Thursday in Italy there were violent clashes as millions of workers joined the nationwide stoppage in protest at the government’s employment law reforms.

Padoan’s message for them was that there would be no U-turns. Earlier this month, parliament approved a bill giving Matteo Renzi’s government a free hand to introduce by decree greater flexibility into the labour market.

But until now it has been unclear whether Italy’s left-right coalition, under pressure from the left wing of Renzi’s Democratic party, would use its powers to the full. Padoan was unequivocal, saying: “The decrees are already prepared and they are such as to render extremely clear the direction: not to water down. No reform is going to be watered down.”

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza