Premier Matteo Renzi told the Lower House on Wednesday that the EU's fiscal compact was damaging Europe's economic outlook. "The fiscal compact and its related measures have caused damage to the economic and political direction of Europe and of Italy too," Renzi said ahead of this week's summit of European leaders. "The principle of flexibility and investments have been interpreted by the Italian press as a request or a kind concession. On the other hand, after a period of controversy, it seems clear that Italy's position is not aimed at obtaining something for itself but seeks to change the EU's political and economic direction".
Last week's surprise moves by the European Central Bank in cutting rates to zero and expanding quantitative easing "deserve all our support but we have to acknowledge that stimulus of a financial nature is not enough" to boost growth, Renzi said Wednesday. "The ECB's policy is very useful but it isn't sufficient to restart not only consumer spending but also to recover competitiveness". He said other measures including tax cuts were needed. ECB President Mario Draghi unveiled an unprecedented monetary package of six measures including cutting the ECB's main refinancing rate to zero and broadening the QE programme, to the delight of European bourses. Italian business leaders have said monetary policy moves alone are not enough.
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