The European Union's top economic official praised Italy's decision to accelerate budget-balancing measures and structural economic reforms on Saturday and said swift implementation would now be crucial.
I strongly support this announcement and call on the authorities to quickly translate it into concrete measures, European Economic and Monetary Affairs Commissioner Olli Rehn told Reuters in a telephone interview.
This will help to boost potential growth, secure budgetary retrenchment and bolster market confidence. Given the gravity of the situation, such a strategy should enjoy broad support across the political spectrum, Rehn said, giving the first EU response to Prime Minister Silvio Berlusconi's announcement.
Berlusconi said on Friday that Rome would accelerate fiscal consolidation measures to achieve a balanced budget in 2013 instead of 2014 as planned, act swiftly to enshrine a balanced budget rule in the constitution and put decrees to parliament in September on labor market and welfare reform.
Asked whether the Italian moves were sufficient to persuade the European Central Bank to buy Italian bonds, which have been under fierce pressure on financial markets, Rehn said he could not speak for the ECB.
However, he said: The Commission's view is that the fiscal strategy is striking the right balance. The essential thing is rigorous implementation.
(reporting by Paul Taylor, editing by Susan Fenton)