Italy hails its removal from EU's deficit blacklist

Italian Prime Minister Enrico Letta welcomed Wednesday the European Commission's recommendation that Rome be removed from its excess deficit blacklist. Letta said Italians "should be proud of this result." The European Union's excessive deficit procedure has imposed corrective actions on Italy since 2009 to get its deficit under control. Italians have accepted the painful cure of tax hikes and welfare cuts introduced by former premier Mario Monti to be back to fiscal discipline, Letta said, who took office last month, leading a fragile coalition government. Billions of euros is expected to be freed after Rome exits the procedure, though Letta said earlier this week that it does not mean the government can immediately use more money for a variety of issues. The European Commission also made several policy recommendations on Wednesday for Rome, such as balancing budget, cutting public debt and making structural reforms, though analysts doubt whether Letta could have them passed in parliament. The Commission also demand Italy strengthen anti-corruption legislation and improve legal proceedings. In fact, Rome has only "tight margins" of maneuver within its budget, European Monetary and Financial Affairs Commissioner Olli Rehn said. To be removed from the EU's deficit blacklist, a country needs to keep its public deficit at no more than 3.0 percent of gross domestic product (GDP) for two consecutive years. Italy forecast a 2.9-percent budget-GDP ratio this year after the number was kept below 3.0 in 2012.