The European Union should exclude public investments from the calculation of budget deficits and issue common euro zone bonds to help growth, a top official at the Organisation for Economic Co-operation and Development said on Sunday.
OECD Chief Economist Pier Carlo Padoan told Italian daily La Stampa the EU's recently agreed "fiscal compact" on controlling public finances should not be re-negotiated but he was in favour of new rules on how budget deficits and debt are assessed.
"Investment spending should be excluded from the calculation of deficits and debt," said the Italian, who is also the OECD's deputy secretary general. "Euro bonds should also be introduced," he added.
Mario Monti's Italian government is lobbying for both the exclusion of investment from deficit calculations and the issuance of common bonds by all 17 euro zone states. Both proposals have so far been resisted by Germany, which says common bonds should not be considered before fiscal discipline is more firmly established in the currency bloc.
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