Italy's new deputy economics minister has described the nation's economic situation "a disaster," saying the deficit in 2006 may exceed 4.5 per cent of gross domestic product.
Italy's deputy economics minister Vincenzo Visco
"The economic situation is very serious and the state of public accounts is a disaster," deputy economics minister Vincenzo Visco told reporters at the lower house of parliament.
Italy is under orders from the European Commission to bring its budget deficit to within 3 per cent of GDP by the end of 2007, to conform with rules governing the 12 nations using euro currency.
Economics minister Tommaso Padoa Schioppa is to meet today in Rome with EU Monetary Affairs Commissioner Joaquin Almunia.
The Organisation for Economic Cooperation and Development, meanwhile, forecast a budget deficit of 4.2 per cent of gross domestic product in 2006, rising to 4.6 per cent in 2007 unless new legislative measures are taken.
The OECD, in its annual report released yestersday, also said Italy's economy should grow 1.4 per cent this year, faster than expected, but then only 1.3 per cent next year. Previous estimates put growth at 1.1 per cent in 2006 and 1.5 percent in 2007.