Italy must press on with reforms, says IMF's Lagarde

(AGI) Milan, Dec 9 - Italy must press on with structuralreforms and institutional changes that will foster productivityand growth, said International Monetary Fund (IMF) DirectorGeneral Christine Lagarde. Speaking at the opening of theBocconi University's 2014-2015 academic year on Tuesday, MsLagarde said there were three issues at stake: labour marketreform, judicial reform and reform of the banking sector, allof which needed to be kept in mind when striving for stronggrowth on all fronts and a better labour market in Italy. TheItalian banking sector needed to be reformed in order to makeit

(AGI) Milan, Dec 9 - Italy must press on with structuralreforms and institutional changes that will foster productivityand growth, said International Monetary Fund (IMF) DirectorGeneral Christine Lagarde. Speaking at the opening of theBocconi University's 2014-2015 academic year on Tuesday, MsLagarde said there were three issues at stake: labour marketreform, judicial reform and reform of the banking sector, allof which needed to be kept in mind when striving for stronggrowth on all fronts and a better labour market in Italy. TheItalian banking sector needed to be reformed in order to makeit stronger and capable of sustaining recovery, especially inthe small to medium-sized business sector. The Italianfinancial system, she said, was burdened with bad debts andlimited credit capability. The Comprehensive Assessmentexercise carried out by the European Central Bank had been amajor step in defining the nature of the problem and itspossible solutions. There was a need for new insolvencyframeworks to help businesses and families balance their books,and banks should increase their debt write-offs significantlyin order to bring the number of bad debts back to pre-crisislevels. Generally-speaking, the revitalisation of small tomedium-sized enterprises in Italy could be of crucialimportance in facilitating the flow of credit into the economy,given that they were the mainstay of the country's economy andhad been harder-hit by the financial crisis than largerenterprises, with greater fiscal pressure and lowprofitability. Basically, a strategy targeted at restructuringthe small to medium-sized business sector would provide impetusfor growth and new job creation, she concluded. (AGI) . .