BRUSSELS – The stability plan planned by the Italian government for the next four years is fine, it is approved. But from Europe there is also a strong call to Rome to remain within the limits of containment of the deficit envisaged by the document. A strong warning “because there are risks that the established goals will not be respected” and “because there have been no significant steps forward in facing the challenges for public accounts deriving from social security and other costs linked to aging”. In the viewpoint pensions and public spending and a 2001 Budget, you consider perhaps not too rigid. For Brussels, the public deficit of 2000 “could be closer to the original target of 1.5% of GDP” than to the revised deficit of 1.3%. For 2001 and subsequent years, “worries remain that the more sustained tax revenue trend expected in the face of tax cuts and social security contributions may not be entirely structural”. Furthermore – observes the EU Commission – “the corrective measures of expenditure” adopted with the 2001 Budget, as well as the provisions to “strengthen the stability pact of the interior, could prove to be less effective than expected”. As for the macroeconomic growth scenario outlined in the Italian plan – which with GDP increases estimated at 2.9% in 2001 and 3.1% in the years 2002-2004 – the EU executive notes that “it could be optimistic in light of the recent developments on the external front “. Brussels considers the fact that Italy has set more “tight” budget targets than the previous stability program and notes the confirmation of a debt-to-GDP ratio below 100% in 2003. However – the Commission insists – “due of the still high debt-to-GDP ratio and of the future challenges on the long-term sustainability of public finances for an aging population, Italy’s targets could have been more ambitious “. For these reasons the Italian government must keep primary expenditure under “strict control”, in order to ensure that the surpluses net of interest expenditure “remain at the high levels announced in the program” (well over 5% of GDP). In particular, “tax cuts should be offset by corresponding reductions in expenditure and be adopted only after better budget results have been obtained than forecasts. Italy – concludes the Commission – should seize every opportunity to improve future budget targets and accelerate the process of consolidating public accounts to favor a more rapid reduction in the debt-to-GDP ratio “.