Italy's finance minister Grilli optimistic on EU economy

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Italy's finance minister has insisted there is a "rising degree of confidence" in the EU economy, but has warned that "we are not yet over the crisis".

Giving evidence to the Economic and Monetary Affairs Committee on 21 January 2013, Vittorio Grilli said he expected to see a "positive turning point" for the economy in the second half of 2013.

The session was the latest in a series of "economic dialogues" with finance ministers of eurozone countries, to discuss measures being taken to promote economic growth.

Italy has the third biggest economy in the eurozone, and the country's technocratic prime minister, Mario Monti, recently announced his resignation, after successfully steering an austerity budget through parliament.

Mr Grilli said he expected Italy to produce a balanced budget at some point during 2013, and that the government was undertaking a number of reforms in the labour market and the pensions sector to try to boost the country's economy.

However he admitted the Italian economy was still only on course to grow by 1% by next year.

The country's economy has been particularly badly hit by the eurozone debt crisis, with public debt hitting a peak of 116% of GDP in 2010, according to EU statistics body, Eurostat.

At the end of 2011, the country's bond-yield, which is the interest rate of bonds issued by a sovereign state, reached a euro-era record of 7.48%, leading to the departure of Silvio Berlusconi.

Fresh elections are due to take place in February, and former prime minister, Silvio Berlusconi, is expected to stand again.

The Monti government has attempted to pass reforms, including implementing a series of spending cuts of €26bn over three years to tackle the deficit.

But many of the proposals have been watered down or stalled as they have gone through parliament.

The next finance minister to appear before the committee will be the Irish finance minister Michael Noonan, on 22 January 2013.

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