The Italian caretaker government has approved a decree to pay off nearly Eur40 billion state funds to pay off debts it has incurred with private companies. The timetable for the release of the funds is the next twelve months.
The decree intends to inject liquidity into cash starved companies in order to boost the economy from its deepest recession yet. This move was also in compliance with European Union edict on deficit ceilings of 3% of the country's gross domestic product.
The government assured it would monitor the situation while the Economy Ministry has said it would implement corrective measures should the deficit hover around the 2.9% limit.
This comes after last week's status quo retention after a cabinet meeting was postponed upon the behest of Economy Minister Vittorio Grilli and Industry Corrado Passera advising Italian Prime Minister Mario Monti to review the payment scheme.
This is clearly a step in the right direction despite the long standing political impasse currently in place in Italy.
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