EU says new Italian budget, economic forecast in line with its own expectations

BRUSSELS – The European Union’s executive says it’s unconcerned by Italy’s warning that it won’t be able to balance its budget next year.

Olivier Bailly, a spokesman for the European Commission, said Thursday Rome’s new forecast for a deeper-than-expected recession was in line with its own predictions for the Italian economy.

The Italian government said Wednesday that because of the weaker economy it now expects to run a deficit of 0.5 per cent of economic output in 2013, up from 0.1 per cent previously planned. It also said it likely won’t balance its finances until 2015.

Bailly said what matters for the Commission is that Italy expects to run a sizable budget surplus when money spent on debt service is stripped out, as well as promised labour reforms.

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