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Italian PM talks big ahead of budget day

Wednesday, October 14, 2015 - 01:36

Italy's Prime Minister has promised headline grabbing cuts in tomorrow's budget. But As Tim Graham reports he's not yet explained how he will cover revenue shortfalls.

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Fighting olive tree leprosy in southern Italy. Just weeks before the harvest begins, farmers here are angry that groves are being destroyed, as the authorities slash and burn to get rid of disease. It's the kind of root and branch approach also being taken in Rome, where Italy's Prime Minister believes his treatment plan for Italy's diseased economy is bearing fruit. Matteo Renzi is about to unveil his 2016 budget, promising headline-grabbing cuts. (SOUNDBITE) (English) ITALIAN PRIME MINISTER, MATTEO RENZI, SAYING: "I think, hope and believe that once the hard phase of structural reform has finished, this parliament will help build, for the future of Europe and the world, an Italy that is stronger and more solid than it has been up until now." After a three-year recession, Italy is staging a modest economic recovery. But public debt remains stubbornly above 130 percent of national output. Matteo Renzi has revealed some of his budget plans early, confirming he will roll back tax evasion reforms set by his predecessor, to try to boost consumer spending. But there's plenty more to do, says Commerzbank's Peter Dixon. (SOUNDBITE) (English) COMMERZBANK GLOBAL FINANCIAL ECONOMIST, PETER DIXON, SAYING: "Undoubtedly, following years of stagnation in the reform process, I think Italy will find the going very tough over the course of the next few years and irrespective of what they do in the short term, I think it will only be a drop in the ocean." Pension reforms are also due in the budget, when a 2012 raise to the minimum retirement age will be rolled back. It's going to take some severe pruning yet before Italy's engine is fully oiled and running smoothly.

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Italian PM talks big ahead of budget day

Wednesday, October 14, 2015 - 01:36