Now EU debate finally on growth: Italian economy minister

Italian Economy Minister Carlo Padoan said the Italian presidency had immediately put growth and employment at the center of the debate and now the EU debate is finally on growth.

"our presidency has indicated that to support the growth in Europe we need a package of measures: the structural reforms, the internal market and the investments," the minister told Xinhua during the recent presentation in Brussels before the EU summit.

According to Padoan, to stimulate growth in Europe "we need a financial instrument able to stimulate the investments because at the movement private and public investments are completely insufficient."

"We need to do long term investments now there are not investments because there is no trust on the long term and this is a reality both in the public and private," said the minister.

The Italian minister explained the role that the new Junker plan will have on EU growth, he said: "I think this plan can help, recently we discussed a lot about the technical aspects and how it will have to work."

He noted that till now the big debate was about how much money the plan will be able to mobilize, that amount is considerable and it's important to dispose of 300 billions euros (about 369 billion U.S. dollars); but there is another very important debate among the EU experts: do we need more money or if the financial resources are enough, do we lack of real investments opportunities and interesting projects?

Answering to this critical question, Padoan clarified "The answer is that we need both, that's why we put in place a task force at EU level, coordinated by EIB and the EU commission, with the aim to identify relevant projects to finance."

The Italian minister continued and underlined also the challenges of the plan.

He said, "Identify relevant projects is key because it implies that the public administrations of the member states must learn to build up useful projects which in countries like Italy is still a difficult at the moment."

"This new attention to the investments is very important because it changes the attitude of the policy makers and it supports the internal market and structural investments. I'm very optimistic about that. What now we need then is to speed up the process," said the minister.

Padoan went on to explain the mechanism of the Junker plan and EU scenario, according to him today in Europe growth is very slow because there are problems of lack of demand and supply, even if this could be considered as strange, "we need to activate more the demand but this demand has to be activated in the context, like in Italy, of a big public debt."

The Italian minister said "we need a long term vision."

"I think then we have to come back to the long term sustainable growth, which is the solution introduced by the British economist Keynes," he said.

"Now we need to use in a more articulated way the national budget, a theme that should be better developed is not the quantity of resources but the quality and what we can do with such resources," said the minister.

He continued "The public investments must be injected where the private are not going to be mobilized. They have to absorb part of risk that private investors evaluate as too high to finance, it's a sort of 'insurance' delivered by a public body to the private investor in order to activate the private action."

"When we say that money is not the problem, this is partly true because in Europe enterprises dispose of a huge liquidity or big market access capacity but they don't want to invest because they imagine the future as uncertain and risk full."

Public initiative will be the key of this important plan, according to Padoan.

"In this context the public role is to 'cover' the risk that the private doesn't want to face with the consequence that the private investment can be activated, then the quantity of public investment is smaller than the one coming from the private but it' s qualitatively very important to activate the private investment. This is the logic of the Junker plan," said the minister.