EU Economy Chief Worried about Italy

Italy needs political stability to overcome economic difficulties and a bout of poor economic data, European Union economics chief Olli Rehn said Friday.

Mr. Rehn said the Italian government should “concentrate on economic reforms” and noted that the latest economic indicators from Italy “are not that good.”

Industrial output fell 1.1% in July from a year earlier, the EU statistics agency said Thursday. Italy’s gross domestic product shrank 0.2% in the second quarter from a year earlier. During the same three months, the euro zone as a whole emerged from 18 months of recession.

Earlier this week, Italian 10-year bonds yields surpassed those of Spain for the first time in a year and a half on concerns that former Premier Silvio Berlusconi will pull his party out of the fragile coalition if he is expelled from the Senate after his tax fraud conviction.

Source: MarketWatch