Italy urged to tackle economic reforms

The European Commission on Wednesday urged Italy to bolster its economic reforms, days after an election witnessed eurosceptic parties lead the polls.

"Italy's ongoing recovery offers a window of opportunity to boost the reform momentum," the EU's executive body said in its semi-annual report on EU member states' national economies.

Italy, along with Cyprus and Croatia, had "excessive economic imbalances," which "jeopardize or risk jeopardizing the proper function of the Economic and Monetary Union," according to the report.

Read more: Italy: Crisis? What crisis?

The warning could put Brussels on a collision course with Rome if the next government is led by an anti-establishment party, whether the leftist 5 Star Movement (M5S) or far-right Northern League.

Both parties have vowed to refuse dictates from Brussels, but unless there is a dramatic shift in the political landscape,  they are unlikely to lead the next government due to electoral rules passed last year.

'Making progress'

Italy is set to become the third-largest economy in the EU after Brexit. However, despite growth increasing across the eurozone, the Italian economy has yet to shake off its sluggish recovery in the wake of the 2008 financial crisis.

Commenting on the report, European Commission Vice President Valdis Dombrovskis said many other member states "are making progress" in reforming their economies and implementing corrective measures for what he described as "macroeconomic imbalances."

"Strong economies are those that keep addressing their weaknesses, even when times are good," said Dombrovskis. "This is precisely what our strategy should be both at the EU and national levels."

The report also pointed to Germany, saying it was experiencing imbalances which could "adversely" affect the functioning of the bloc. However, the report suggested the risks were less considerable compared to other member states' issues.

Read more: Opinion: Germany's boom and Europe's problems

Under pressure

Dombrovskis has come under increasing pressure from some EU nations to be harder on public spending rules. Eight northern European countries said they were against further integrating EU economies if some member states continue to ignore existing rules.

Read more: Italy, the sick man of Europe?

A stronger economic and monetary union "starts with implementing structural reforms and respecting the Stability and Growth Pact (SGP)," said a statement from the grouping, which included Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden.

The SGP is a "set of rules designed to ensure that countries in the European Union pursue sound public finances and coordinate their fiscal policies," according to the Commission.

ls/sms (AFP, dpa