June 20, 2018 / 7:59 AM / in 2 months

ECB's Villeroy to Italy: all euro zone members must respect rules

PARIS (Reuters) - The economic choices of Italy’s new government remain largely uncertain and all euro zone countries must stick to the bloc’s rules, European Central Bank (ECB) policymaker Francois Villeroy de Galhau said on Wednesday.

FILE PHOTO: Governor of the Bank of France Francois Villeroy de Galhau in Berlin, Germany, September 23, 2016. REUTERS/Axel Schmidt/File Photo

Villeroy, who is also the Bank of France head, said in an annual report on the French and euro zone economies that Italy needed to address its high public debt and unemployment through national reforms.

“The new government’s economic policy choices are still uncertain,” Villeroy said in the letter to the French president.

“Each of (the euro zone’s) members must abide by its rules, and they all share a common destiny,” he added.

The new government in Rome - comprising the populist 5-Star Movement and far-right League - is expected to propose spending plans at odds with EU fiscal rules which, if carried out in full, could worsen what is already the euro zone’s second-highest public debt ratio.

Reporting by Leigh Thomas; Editing by Sudip Kar-Gupta

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