##ing, increase the amount of resources allocated to productive expenditure and reduce the tax burden, and make room for manoeuvre during cyclical downturns. belgium has reduced its public debt from 122 per cent of gdp in 1997 to 89 per cent in 2006, with very considerable savings in interest payments. major factors in the consolidation of the public finances were the introduction of rules making regional and local governments accountable and the institution of an independent authority ( including representatives of central and regional governments and the central bank ) that sets budgetary targets for all levels of government and reports any overshoots in the course of the year. finally, by law any extra revenue with respect to forecasts must go entirely to reducing the debt. other european countries, some with significantly lower public debt than italy ’ s, have kept their budgets near balance or in surplus since the establishment of monetary union, among other things so as to be in a position to face the problems deriving from the ageing of the population. the planning document reaffirms the importance of controlling the quality and quantity of public spending in order to reconcile the adjustment of the public finances with a lowering of the fiscal burden, which is now near the highest levels registered in recent decades. according to the planning document ’ s macroeconomic framework, achieving a balanced budget in 2011 without increasing taxes or decreasing investment with respect to the budget on a current legislation basis requires that the ratio of primary expenditure to gdp fall by nearly 3 percentage points between 2008 and 2011, with an average annual reduction of outlays equal to 0. 5 per cent in real terms, in contrast with an average annual increase of 2. 3 per cent over the past decade. according to the data provided by the planning document, on the basis of current legislation the ratio of primary expenditure to gdp is expected to decline by 0. 2 percentage points in 2008. based on unchanged policies, it would rise by several tenths of a point. other european countries have managed to reduce their budget deficits in recent years acting on the level and composition of spending. in germany, for instance, the ratio of primary expenditure to gdp decreased from 45. 5 per cent in 2003 to 42. 9 per cent in 2006, lower than in italy. this made it possible to reduce both the deficit, from 4 to 1. 7 per cent of gdp, and tax revenue. assuming unchanged policies, budget balance will be achieved in 2008. the reduction in expenditure has been concentrated in the areas of social benefits,

an organic vision of the objectives and instruments, the start of the action plans can restore confidence among all economic agents : the financial system, firms, consumers and savers. looking at the experience of the most advanced economies, it is necessary for europe to relaunch programmes for infrastructure, innovation and research. the progress made in economic and institutional integration and the union ’ s enlargement provide a solid foundation. in italy as well we must move resolutely in the direction of faster growth, higher employment, security for the elderly and valid prospects for the young. it can be done. we must do it.