Italian Economy Minister Domenico Siniscalco says he is confident that the European Commission will give Italy until 2007 to get its deficit back below 3 percent of GDP. Rome has been negotiating with Brussels in recent days, as its deficit exceeded the EU’s 3 percent ceiling in three of the last four years; It is projected to do so again in 2005 and 2006. The Commission is set to make a formal recommendation on the timescale this Wednesday. The case is being watched closely as a test of whether the Stability and Growth Pact — designed to underpin the euro — still has any teeth after EU governments made it more flexible in March.
Pact elasticity set to benefit Italy