Recession stirs doubts over Italy’s targets

Italy’s ambitious deficit reduction targets could be jeopardised by recession and high interest rates that would require further austerity measures by Mario Monti’s technocrat government, according to a confidential analysis presented to eurozone finance ministers by the intensified Italian monitoring mission of the European Commission in March 2012.

The warning contained in a four-page report titled 'Budgetary situation in Italy' and circulated at the informal ECOFIN finance ministers’ meeting in Copenhagen on the 30 march 2012, were borne out by figures released on the 2 April 2012 showing manufacturing activity contracted for the eighth consecutive month while joblessness rose to their highest levels in more than a decade.