By Ilaria Polleschi
MILAN (Reuters) - Italian Prime Minister Matteo Renzi on Friday stepped up his calls for new rules on budget limits in the euro zone, saying the current framework is hurting growth and costing jobs.
"Having rules that are all centered on austerity and rigour is a waste of time if unemployment doubles," Renzi told a conference in Milan, adding that Italy would use its six-month presidency of the European Union from July to push for changes.
"We need rules that link together reforms and growth."
In recent days Renzi has repeated that Italy will keep a lid on its budget deficit and adopt reforms to make its economy more competitive. Then once it has convinced its partners of its credibility it expects to obtain greater budget flexibility.
"We will explain to our EU friends that we who respect all the rules are asking to change the rules," he said on Friday.
Italy's budget deficit has come in bang on the EU's 3 percent of gross domestic product limit in each of the last two years but its public debt, the second highest in the euro zone after Greece's, has risen steadily.
The debt reached a record of almost 133 percent of output in 2013 and is forecast to rise further this year.
Italian government officials have told Reuters that Italy will try to garner support for a system by which countries which adopt growth-fostering reforms are given more time by the European Commission to bring their public finances into line.
This kind of set-up has already been debated among EU governments but failed to win the backing of Germany and some other northern European countries.
But Italy hopes that, with France seeking more time to lower its budget deficit and growing anti-austerity sentiment around the euro zone, the approach may be more warmly received when Italy renews the proposal in the second half of this year.
A tricky negotiating point may be the sequencing, or whether budget leniency should be granted when the reforms are promised, presented, or only after they become law.
Renzi, who ousted his predecessor Enrico Letta in a party coup in February, has set an ambitious agenda of institutional reforms but has so far presented almost no legislation on the economy.
On Friday he was strongly applauded when he promised the Milan conference of furniture designers that he would launch "a violent attack" on bureaucracy, considered one of the major problems of Italy's chronically stagnant economy.
(Reporting by Ilaria Polleschi, Writing by Gavin Jones, Editing by Angus MacSwan)
