##equacy framework ( caf ) review, launched under the italian g20 presidency, which has increased the ibrd's financing capacity by up to $ 150 billion over the next decade. we congratulate the bank for the newly adopted ibrd framework of restoration measures, while calling for rapid approval of remaining reforms to ensure its full functionality and alignment with major regional mdbs. 1 / 4 bis - central bankers'speeches we also applaud the work that the mdbs are jointly making to better recognize the value of existing callable capital. while continuing the dialogue with credit rating agencies, we urge management to integrate a part of callable capital into the wb's capital adequacy metrics. we also appreciate the newly established enhanced callable capital, and we call for the most inclusive approach in recognizing the financial leverage of shareholders'voluntary contributions in a way that is consistent with the credit rating agencies'practice. we should be very cautious in designing any reform of ibrd pricing which may have negative impacts on ibrd and ida financial capacity, which we have been striving to expand. moreover, we should be aware of any conflicting effects on the newly established framework for financial incentives. we also call for greater analysis of spillovers of price changes for the broader mdbs system, as well as on their implications for the bank budget anchor and the incentives for country graduation and private sector financing. we urge mdbs to develop effective partnerships with climate and environmental vertical funds so as to maximize scarce concessional resources. mdbs can greatly help improve access to these funds at scale and speed. thanks to their financial leverage, mdbs can also augment the resources available in vertical funds, by associating programmatic approaches with their parallel subscription of wbg hybrid capital and portfolio guarantees, to strengthen predictability of resources for beneficiary countries. we look forward to continuing work with the wbg to implement the conclusions of the forthcoming g20 independent high - level expert group review on the vertical climate and environmental funds. we appreciate the wbg's new approach to private capital mobilization. enhanced country diagnostics, stronger country dialogue, and closer collaboration among the wbg institutions are needed to increase the supply of effective projects. the wbg guarantees platform, the publication of gems data, the introduction of new products to mitigate foreign exchange risks, and the promotion of policy reforms specifically designed to improve the business environment will all help lower the actual and perceived risks of private investment in developing countries.

the contribution they make to domestic demand and employment and in order to reduce the infrastructure shortfall in large parts of the country and to increase the efficiency of the economy as a whole. this raises the issue of the need to improve the functionality of local authorities, to enhance their project development and execution capabilities. changes must be made to the legal system in order to eliminate regulations and divisions of responsibility that make it hard to bring public works to the starting gate and then through to the finish line. the action already taken to improve the efficiency of government must be followed up. the improvement in the public finances was interrupted in 2000. the state sector borrowing requirement, net of settlements of past debts and privatization receipts, rose back to 2. 2 per cent of gdp, from 1. 5 per cent the year before. the overshoot with respect to the estimates included in the economic and financial planning document was equal to 1 per cent of gdp. in december the government presented the update of the stability programme for italy to the european council and commission. the target for net borrowing of 0. 8 per cent of gdp in 2001 was confirmed. the results for the borrowing requirement for 2000 make that objective more difficult. immediate and resolute action is necessary to ensure that it is achieved. the situation of the public finances must be checked month by month. any overshoots must be corrected. unfavourable trends in receipts will have to be offset with curbs on disbursements ; careful controls on spending are essential in order to avoid having to introduce revenue - side measures. the growth in gdp in 2001 could be on the order of 2. 5 per cent. the planned reduction in the tax burden will have beneficial effects on domestic demand and growth. adjustments in the pension system are necessary in order to ensure its equilibrium in the medium term. more stringent budgetary rules need to be introduced for local authorities. the planned reduction in the tax burden over the coming years must be credible ; it must become part of economic agents'expectations. certainty of a reduction in taxation encourages investment and consumption, reduces the disincentives to work and increases our economy's potential rate of growth. we must put all the time available to us to good use ; create the conditions for inserting the italian economy into the world recovery ; strengthen the country's economic and civil development and the prospects of wellbeing for the younger generations and for families. * * *