ISTANBUL (Reuters) - Europe needs to be bolder in boosting investment and take policy steps that encourage private sector spending particularly in infrastructure, Italian Economy Minister Pier Carlo Padoan said on Monday.
A long-running debate over whether Europe should focus more on stimulus or austerity to resolve its economic problems has become further polarised since a new Greek government led by the anti-bailout Syriza party came to power two weeks ago.
France and Italy have urged more investment in the single currency bloc, against resistance to spending from Germany, which is focussing on balancing its budget.
“We need to be bolder in Europe in terms of risk taking ... I hope that policy action will indeed facilitate stronger private sector investments, especially infrastructure investments,” Padoan told an Institute of International Finance gathering in Istanbul ahead of a meeting of G20 finance chiefs.
Padoan said lower oil prices and the anticipated impact of a European Central Bank stimulus plan to buy around a trillion euros (0.74 trillion pounds) of government bonds had helped improve the economic picture in the last few months.
The euro exchange rate is set to become more “consistent”, Padoan said, adding that he hoped the better backdrop would not “loosen” euro zone countries’ efforts to pass structural reforms.
Reporting by Ece Toksabay; Writing by Nick Tattersall and Isla Binnie; editing by John Stonestreet