Italy, France groups eye strong stability pact

The leaders of the Italian and French employers' organisations said today they opposed their governments' position in favour …

The leaders of the Italian and French employers' organisations said today they opposed their governments' position in favour of easing European Union budget rules and wanted to maintain "rigorous" control on deficit and public spending.

"We want to keep the Stability Pact as it is, and what [Italian Prime Minister Silvio] Berlusconi and [French Prime Minister Jean-Pierre] Raffarin said cannot have our support", said Mr Ernest-Antoine Seilliere, head of France's business federation MEDEF.

He was flanked at a joint news conference in Rome by the head of Italy's Confindustria industrialists' group, Mr Luca di Montezemolo.

Mr Seilliere said he and Mr Montezemolo were "worried" by a Franco-Italian moves to make the Stability Pact more flexible to allow public investment on infrastructure and defence to be excluded from its deficit ceiling of 3 per cent of GDP.

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The deficit ceiling is necessary "to break excessive public spending which deprives firms of cash flow", Mr Seilliere said.

France's public deficit has exceeded the pact's 3 per cent of GDP ceiling for three straight years, while Italy has repeatedly missed its deficit goals but managed to stay below the 3 per cent threshold thanks to the heavy use of one-off measures.