ROME (Reuters) - Italy will propose exempting borrowing used to settle bills with commercial creditors from official calculations of public debt under plans being discussed between Rome and Berlin, Italian newspapers reported on Saturday.
The daily La Repubblica said Prime Minister Mario Monti would take the proposal to a European Council meeting in June as part of a package of measures to boost the EU's flagging economy. He would also propose an exemption for debt used for investment spending.
Italian public authorities are estimated to owe around 60 billion euros to companies, so exempting debt raised to settle such bills from public debt calculations could help win much-needed breathing space to the Treasury.
Italy's public debt burden is the second highest in Europe at more than 120 percent of gross domestic product.
Public authorities have a particularly bad record in paying their bills on time and companies have complained for years about late payments which have added to the severe liquidity problems already facing many firms struggling to obtain bank loans.
In some cases, frequently involving health authorities, companies can be made to wait for years before bills are settled.
Industry Minister Corrado Passera has in the past proposed using short-term bonds as a form of payment but has been blocked by concerns about adding to the debt pile.
La Repubblica said Monti had sounded out German Chancellor Angela Merkel and European Commission President Jose Manuel Barroso over the measure, one of a series of ideas designed to complement a fiscal pact that EU member states are due to ratify by the end of the year.
Monti's government last month revised its growth and fiscal targets, putting back by a year its goal of balancing the budget and revising a previous estimate of 0.4 percent economic contraction in 2012 to a 1.2 percent fall.
It has tried to strike a balance between austerity and growth, insisting on its commitment to budget rigor and controlling the 1.9 trillion euro public debt while seeking to avoid pushing the economy deeper into recession.
(Reporting By James Mackenzie; Editing by John Stonestreet)
The Worst Gun Ever Made? - Bearing Arms - Calico, Video
- What Is Your U.S. Income Percentile Ranking?
Guy Benson fact-checks Sally Kohn
Why California Environmentalists Hate Water | Human Events
Reporter asks Ted Cruz four times: “How do you define amnesty?”
Contained? New Report Says There’s ‘Unprecedented’ ISIS Mobilization In The U.S.
5 Reasons I Will Not Vote For Trump If He Is The GOP Nominee | RedState