EU worries about Italian recession risk, German slowdown

Italy's economic situation is "delicate" and needs to be monitored closely, the European Union economics commissioner Pierre Moscovici said on Friday, as concerns are growing over the threat of recession there and a slowdown in Germany.

Moscovici's worries were echoed by France's Finance Minister Bruno Le Maire, who openly talked of a recession in Italy arriving at a meeting of EU finance ministers in Bucharest, which will also discuss the implications for Italy's huge public debt caused by the emigration of skilled workers.

Moscovici said some estimates showed Italy could be in a recession this year. "These are figures that we need to follow very closely," he said.

Earlier this week the Organisation for Economic Cooperation and Development, a club of mostly rich nations, forecast a 0.2-percent output fall in Italy this year.

Moscovici said the Commission will issue new economic forecasts on May 7. In its latest estimates released in February, the Commission predicted a 0.2-percent growth for Italy this year.

He said that the new EU forecasts will acknowledge the current economic slowdown that is most affecting Germany and Italy in the 19-country euro zone.

Italy's Finance Minister Giovanni Tria said Italy's economic woes were the result of weaker growth in Germany and in Europe, but declined to give new estimates over the country's growth.

In its latest forecasts, the Italian government had predicted a 1-percent expansion this year — a figure that was considered too optimistic by most economists as the Italian eurosceptic government embarked on free-spending plans with little impact on growth.

"We must be very careful about this situation, but we must not be too alarmist," Moscovici said.

SS