Europe

German finance minister seeks to reassure Germans on Italy concerns

FILE PHOTO: Germany's Minister of Finance Olaf Scholz walks back to his hotel after meetings at the G7 Finance Ministers Summit in Whistler,

FILE PHOTO: Germany’s Minister of Finance Olaf Scholz walks back to his hotel after meetings at the G7 Finance Ministers Summit in Whistler, British Columbia, Canada, June 1, 2018. REUTERS/Ben Nelms

BERLIN (Reuters) – German Finance Minister Olaf Scholz late on Thursday sought to assuage German citizens about Italy’s financial outlook as the new coalition government in Rome called for tough negotiations with Europe over the economy.

Italy’s Prime Minister Giuseppe Conte, backed by the anti-establishment 5-Star movement and the far-right League, won a confidence vote in the lower house of parliament on Wednesday, allowing him to forge ahead with a program that includes tax cuts, benefit hikes and justice reform.

Some German politicians and industry executives have voiced concerns that the new government’s big-spending plans will jeopardize fragile state accounts.

Scholz, on a late night talk show on German broadcaster ZDF, said Italy clearly faced some challenges, including its high debt, but said he remained upbeat about the pro-European perspective of most Italians.

“I am very certain that Italy will not fail,” Scholz said, adding that he considered it “a little irresponsible” for Germans to fixate on potential crises growing out of the governmental change in Italy. “I think we can keep a calm view of it,” he said.

Scholz said he did not expect Italy to default or leave the eurozone.

Ultimately, he said it was up to the Italian government and people to make difficult political decisions about the way forward, and the most important thing would be to stimulate economic growth in all parts of the country.

(Reporting by Andrea Shalal and Gernot Heller; Editing by Richard Chang)

 

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Categories: Europe, News Wire, Politics

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