A credible strategy to reduce the burden of Italy’s high public debt in the medium term can no longer be postponed and the factors that lead investors to perceive higher risks, such as lax budgetary conditions and the prevalence of transfers and subsidies over growth-enhancing measures, should be tackled.
As you are well aware, budget outcomes have often deviated from projections--in some cases, significantly--and they will continue to do so. Accordingly, well-designed mechanisms that facilitate midcourse corrections would ease the task of bringing the budget back into line when it goes awry.