ROME, March 12 Italy will have to obtain
authorisation from European authorities if its plan to pay off
arrears of commercial debt by public authorities leads it to
breach EU borrowing limits, Economy Minister Pier Carlo Padoan
said on Wednesday.
Prime Minister Matteo Renzi earlier pledged to free up funds
to pay off 68 billion euros of commercial arrears by July but
there has been considerable confusion about whether it can do so
while still respecting EU debt and deficit rules.
Padoan said authorities did not know exactly how much would
need to be paid. But he said that Italy would need clearance
from Brussels if the payments caused it to overstep tight EU
debt reduction rules.
"I won't disguise the fact that we don't have a very clear
idea of how much the debt arrears which can actually be
mobilised amounts to," Padoan told a news conference.
He said that both debt payments and planned tax cuts could
raise Italy's 2 trillion euro debt, which currently amounts to
some 133 percent of gross domestic product. He said the planned
measures would have to be evaluated "in a general macroeconomic
"And wherever there is a change in position, we would have
to obtain the approval of parliament and the approval of the
European Commission," he said.