OECD warns Italy that it may need to cut spending further

(Pictured: Italian finance minister Fabrizio Saccomanni, source: Reuters)

The OECD's Pier Padoan has said that Italy may have to reduce its 2013 deficit by cutting public spending. Padoan warned that action may be necessary if the deficit remained above three per cent. The official stressed that Italy should keep its EU commitments in 2013, before waiting until next year to demand flexibility.

Finance minister Fabrizio Saccomanni has previously said that he believes it necessary to get Italy out its deficit procedure to reduce borrowing costs and increase investment.

OECD Secretary General Angel Gurria:

If Italy wants to go to the negotiations and exit the excessive deficit procedure they have to present new measures.