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Villa d'Este, a luxury hotel, Cernobbio, on the shores of Lake Como
The Italian economy is forecast to shrink in the full year 2014, having returned to recession in the first half. Meanwhile, Matteo Renzi, prime minister, has strong public support but his plans for reforms only get minority support according to a poll published on Sunday.
Ref, the Milan-based economics institute, forecast Monday that GDP would fall 0.2% this year compared with the official target of a 0.8% rise while the budget deficit is forecast to meet the EU's 3% of GDP ceiling for the third year in a row, up from the official 2.6% target for 2014.
The Local news service reports that a poll conducted by Ipsos and published in Corriere della Sera on Sunday, found that almost two thirds of Italians supported Renzi - - a 3% increase since July.
Faith in the activities of the government also remained solid, with 58% expressing positive views. However, just 42% said they supported Renzi's plans to boost economic growth, with 46% expressing negative views.
The poll found that 42% supported his reform of public administration and 48% expressed positive views about his school reform.
Last weekend at the annual Ambrosetti Forum held at Villa d'Este, Cernobbio, on the shores of Lake Como, Mario Monti, former prime minister, said in an interview at the forum that Italy is still embroiled in a financial crisis - - but one that is insufficiently severe to convince the public that reforms are urgently needed.
"The acute emergency that we now have in the real economy, and in the employment situation, is there. It bites deeply into society," Monti told CNBC.
Pier Carlo Padoan, finance minister, who will chair a meeting of EU finance ministers in Milan next weekend as part of the current Italian EU presidency, told the Financial Times in Cernobbio that “benchmarks” to measure and compare structural reforms would be both “disciplining” and “confidence building.”
“This would be extremely useful for Europe and for Italy,” Padoan said. “You need to exert peer pressure to scrutinise what countries are doing.”
Padoan, a former chief economist of the OECD, said it would take three years for reforms to show visible results and he rejected claims that Spain has made much more progress in pushing through reforms.
In an op-ed published in several European newspapers on Sunday, Padoan proposed a "growth compact" to counterbalance the EU's "fiscal compact" and said the EU's finance ministers should have powers to closely and jointly monitor each others' reform progress.
The prime minister has said he will host a meeting of EU leaders in Milan in the first half of October devoted to developing a new growth-boosting strategy.
Last month it was reported that Italy will announce its budget for 2015 in October rather than September to allow it to use the European Union's latest national accounts standards.
The European Union unveiled in January a new system of calculating national accounts aimed at adapting to technological and economic changes which have taken place since the last procedure was written up in 1995.
The Italian Treasury said it would wait until September, when data calculated under the new rules will be released by national statistics agency ISTAT, before updating its accounts.
Renzi reforms key to wooing investors Sep 8, 2014 : Investors are showing a strong interest in Italy. But the FT's Rachel Sanderson finds the consensus among business leaders at this year's Ambrosetti Forum is that Matteo Renzi's government needs to pass tough structural reforms to convert investor interest into action.