IMF urges ECB to help ailing Italian economy

5 July 2013

The International Monetary Fund (IMF) has urged for more action from the European Central Bank (ECB) to help the recession-bound Italian economy.

It wants the ECB to make more direct asset purchases and create additional long-term cheap loans to banks in the eurozone.

Italy is stuck in its longest recession since the war and its gross domestic product has been shrinking for seven consecutive quarters since the middle of 2011.

To get things moving again, the IMF has urged the Italian government to implement reform quickly.

It said recent legislation did not go far enough and there is a greater need for deregulation in the service sector and the labour market.

"Accelerating the momentum for reform will be essential to jumpstart growth and create jobs," the IMF remarked.

In its latest report, the IMF said Italy, which is the eurozone's third largest economy, would contract by 1.8 per cent this year.

By Gary Cooper

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