Debt crisis: Italy’s deficit to double, but Germany’s to halve
Italy has almost doubled its deficit forecast, as Germany halved its, underscoring the increasing lag of « sinner states » that could persuade the European Central Bank to cut interest rates on Thursday.
Mario Monti, the Italian prime minister, told a joint press conference with Angela Merkel, the German chancellor, that Italy’s deficit would rise to 2pc of GDP rather than the 1.3pc predicted, while the German finance ministry revised its forecast from 1pc to 0.5pc « thanks to the favourable overall economic development ».
Referring to their clash at the Brussels summit, Mrs Merkel said she and Mr Monti were « willing to overcome our difficulties » and work together to end the three-year-old debt crisis. She said that « every day counts » in finding a resolution.
Francois Hollande, the French president, announced €7.2bn (£5.8bn) of tax rises in a bid to relieve France’s « crushing » national debt. The government expects the French economy to grow by just 0.3pc this year, compared with previous estimates of 0.7pc.
C’est comme la fable de la cigale et de la fourmi… Sauf que dans la réalité la cigale réussit à plumer la fourmi et une fois l’hiver venu, tout le monde meure de faim…