Bank of Italy’s Visco says debt reduction strategy cannot wait

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MILAN, May 16 (Reuters) – Italy cannot delay any further a clear strategy to reduce its high public debt, central bank Governor Ignazio Visco said on Thursday.

In the text of a speech published on the central bank website, Visco said returns demanded by investors to hold Italian bonds were still too high and were beginning to translate into slightly tighter credit conditions, especially for smaller companies.

“A credible strategy to reduce the burden of Italy’s high public debt in the medium term can no longer be postponed,” Visco said.

“Factors that lead investors to perceive higher risks, such as lax budgetary conditions and the prevalence of transfers and subsidies over growth-enhancing measures, should be tackled,” he added. (Reporting by Valentina Za and Giuseppe Fonte, editing by Giulio Piovaccari)

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