: italy ( 1 ) canada is not included for lack of comparable data. ( 2 ) total financial assets / liabilities are the sum of assets / liabilities of the internal sectors of each country in current dollars ; assets are net of bank loans to internal sectors ; liabilities are net of internal sectors'bank deposits. gdp is the sum of national gdps in current dollars. sources : for italy, financial accounts ; for other countries, based on oecd and imf data. table 7 foreign currency assets and liabilities of banks resident in industrial countries ( * ) ( billions of dollars ) assets 1996 ( * * ) $ % $ % $ % $ % $ % belgian franc german mark dutch guilder french franc italian lira japanese yen british pound swiss franc ecu us dollar 27. 0 622. 4 47. 6 128. 6 83. 1 196. 7 138. 6 196. 0 235. 6 2, 385. 0 0. 7 15. 3 1. 2 3. 2 2. 0 4. 8 3. 4 4. 8 5. 8 58. 7 29. 1 647. 3 52. 0 139. 5 113. 6 188. 7 128. 4 169. 9 217. 2 2, 398. 8 0. 7 15. 8 1. 3 3. 4 2. 8 4. 6 3. 1 4. 2 5. 3 58. 7 33. 3 759. 2 55. 0 138. 4 146. 7 238. 4 144. 5 178. 7 207. 8 2, 536. 1 0. 7 17. 1 1. 2 3. 1 3. 3 5. 4 3. 3 4. 0 4. 7 57. 1 38. 9 820. 6 65. 8 160. 6 166. 1 324. 1 145. 5 207. 5 201. 5 2, 578. 1 0. 8 17. 4 1. 4 3. 4 3. 5 6. 9 3. 1 4. 4 4. 3 54. 8 47. 1 846. 8 76. 7 169. 0 220. 9 304. 8 150. 7 195. 8 182. 0 2, 644. 5 1. 0 17. 5 1. 6 3. 5 4. 6 6. 3 3. 1 4. 0 3. 8 54. 7 total ( * ) 4, 060. 5 100. 0 4, 084. 4 100.

rates ; the treasury ’ s spending on this item declined in absolute terms, despite the increase of 6 per cent in the stock of debt. the improvement in the budget deficit suffered a setback, however. the overall borrowing requirement grew in absolute terms and remained unchanged in relation to gdp at 7. 4 per cent. the supplementary budget measures adopted in the middle of the year failed to prevent a large overshoot on the order of 30 trillion lire compared with the original target set in september 1995. in the forecasting and planning report published last september the government increased the 1997 budget adjustment to 62. 5 trillion lire, compared with 37. 5 trillion envisaged in the economic and financial planning document. this is a demanding commitment that is already having beneficial effects on government securities prices and the financial markets. as i pointed out in my parliamentary hearing on the finance law, the forecasts of the borrowing requirement in 1997 reflect highly favourable assessments concerning the primary surplus ; these are only compensated for in part by the significantly better - than - forecast behaviour of interest rates. the lower level of the primary surplus in 1996, with a shortfall of around 20 trillion lire compared with last september ’ s estimates, will have repercussions on the results in 1997 ; these will also be affected by the cyclical slowdown that started at the beginning of 1996 and became more pronounced in the last part of the year. the adjustment of the budget deficit will have to be pursued by curbing the growth in expenditure. on the revenue side it will be necessary to reduce tax avoidance and evasion. further fiscal tightening would have adverse effects on domestic demand and prices. in order to create confidence in a return to equilibrium in the medium term, budget adjustment measures will have to be of a structural nature. there is an urgent need to revive growth. italy, like many other leading european countries, is far from making full use of its resources of saving, labour and entrepreneurial ability, with consequent economic and social costs. in cyclical terms the level of economic activity remains unsatisfactory. according to the latest forecasts, the growth in gdp in 1997 will be just over 1 per cent. the trade surplus will remain large, as will the surplus on the current account of the balance of payments, thereby contributing to a further improvement in the country ’ s external position and providing support for the lira. it will be necessary to modify the composition of public expenditure, by reducing that on current account, in