Italy wants anti-terror costs out of Stability pact

Spending on anti-terrorism measures should be excluded from deficit calculations in the European Union Stability Pact, Italian…

Spending on anti-terrorism measures should be excluded from deficit calculations in the European Union Stability Pact, Italian Interior Minister Mr Giuseppe Pisanu said today.

In an opinion piece published by Il Sole 24 Ore newspaper, Mr Pisanu said economic growth and security went hand in hand.     "Would it not be a good idea today to consider spending on security as the most important and most precious investment to give the economic world the tranquility and confidence that it needs," Mr Pisanu wrote.

Italy has long argued that spending on research and infrastructure investment should be excluded from the deficit rules, but some Italian economists have recently suggested ring-fencing security spending.

Il Sole 24 Ore reported on Sunday that spending on internal security in Italy had risen to 16.9 billion euros ($20.59 billion) in 2004 from 13.8 billion in 2001.

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But the paper said the additional funds had proved insufficient, adding that security forces did not have the money to pay for more Arabic translators and at times did not even have the cash to fill up their cars or travel abroad.

Italy, which has the third largest debt mountain in the world, has thus far managed to keep its annual deficit within three percent of gross domestic product, as demanded by the Stability Pact.

The Treasury has warned that it will have to impose a tight cap on ministry spending next year to stay within the limits.