June 13, 2019 / 2:04 PM / 3 months ago

Italy must preserve investor confidence, mini-bond idea unnecessary - IMF

FILE PHOTO: International Monetary Fund Managing Director Christine Lagarde arrives for the Women's Forum Americas, at Claustro de Sor Juana University in Mexico City, Mexico, May 30, 2019. REUTERS/Carlos Jasso

LUXEMBOURG (Reuters) - Italy, a high-debt and low growth country, should focus on structural reforms that boost productivity and keep a fiscal policy that maintains investor confidence, the head of the International Monetary Fund Christine Lagarde said on Thursday.

“Any reforms that will boost productivity will be critically important. That’s number one. Number two: a fiscal path that will actually maintain the confidence of investors will be critical as well,” she told a news conference.

Asked about the Italian idea of introducing a parallel currency in the form of mini-bonds to pay off government arrears, Lagarde said:

“We think there are many better ways to deal with the payment or arrears that do not require the creation of such instruments. Italian bonds could absolutely do the job.”

Reporting By Jan Strupczewski

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