Press Release: Commission assesses stability programmes of France and Italy

The examination of the updated stability programmes[1] of France and Italy showed that progress towards their medium-term objective (MTO) of a balanced budget needs to be more ambitious. This will require France to substantially cut its public expenditure – currently among the highest in the European Union – faster than envisaged. Structural reforms will also be crucial to raise potential growth and sustain the budgetary consolidation process. Italy succeeded in bringing its budget deficit to well below 3% in 2007. It should build on that result to reach a balanced budget within the programme period and to put its public debt firmly on a descending path. Both countries are at medium risk concerning the long-term sustainability[2] of their public finances, given their current debt levels and the adjustment which still needs to be completed towards the MTO.