Italy’s new finance minister Fabrizio Saccomanni, who will be sworn in with the cabinet on Sunday, said he plans to boost growth in the eurozone’s third-largest economy through a spending pact. Saccomanni, the former director of Italy’s central bank, said he intends to form a “pact” between banks, businesses and consumers which would remove the “psychological uncertainty factor” which has blocked investments and spending. Saccomanni said “a coordinated effort” could “restore precious trust” in the economy and added that he intended to “restructure spending” — a move which would be followed closely by investors concerned about the country’s two trillion euro debt mountain. He did not provide any details about the restructuring, or mention possible tax increases or plans to increase budgets. The country is suffering from its longest recession in 20 years and the new government led by Prime Minister Enrico Letta will have to act fast to reassure European partners it can boost growth. The new minister said he would support “businesses and the population’s weakest,” after months of a gruelling austerity programme imposed by former premier Mario Monti that left Italian citizens reeling. He said he aimed to bring the spread level – the differential between Italian and benchmark German 10-year bonds – down to 100 points or less. The spread currently stands at 285 points, and the ratings agency Moody on Friday warned the country of an “elevated risk” that political inaction would harm investor confidence.
