Economic pledges, stance on Ukraine in focus
Due to meet EU leaders from 1500 GMT
Choosing Brussels for first trip welcomed by EU officials
By Gabriela Baczynska
BRUSSELS, Nov 3 (Reuters) – Georgia Meloni is making her first foreign visit as Italy's prime minister on Thursday to the heart of the European Union, a trip welcomed by officials from a bloc wary that her election promises could destablise the economy.
Known for her firebrand nationalism, Meloni has toned down her anti-European rhetoric, drawing a cautious sigh of relief from the 27-nation EU.
With Russia's war against Ukraine and the related energy, inflation and economic crises topping the European agenda, Meloni will meet EU leaders in Brussels from 1500 GMT.
"Choosing Brussels for her first visit abroad is a good sign and shows the commitment of the new government to keep Italy at core of the European decision making," one EU official said.
Meloni is due to meet EU chairman Charles Michel as well as the heads of the European Parliament, Roberta Metsola, and of the EU executive European Commission, Ursula von der Leyen.
"Her coming here sends an important message in terms of support for Ukraine," said another EU official, noting how Meloni has defended Ukraine since Russia launched its invasion last February, and has supported sanctions against Moscow.
The bloc remains uneasy, however, about Meloni's campaign promises of cutting taxes and raising social benefits, fearing that would risk destabilising Italian finances as the continent faces a new recession.
"We will be looking for signals that she would not ruin Italian finances," said a third EU official. All three spoke under the condition of anonymity.
The first test for Meloni comes as she presents new public finance targets for Italy on Friday.
That will require walking a line between plans to shield consumers from soaring energy prices on the one hand, and the Italian Treasury's forecast of an economic contraction until the second quarter of 2023 on the other.
Meloni is likely to discuss Italy's budget and the upcoming reform of the EU's fiscal rulebook in Brussels, as well as spending some 190 billion euros earmarked for Italy from the bloc's stimulus to help economies heal from the COVID pandemic.
Analysts said Meloni would seek a balance between building her international credentials and winning fiscal leeway.
"There is a risk on the fiscal side. But she's also sent more moderate messages recently. Meloni will try to appear aligned on Ukraine and Russia, and moderate on finances," said Gregory Claeys of the Bruegel EU think-tank.
Francesco Galietti of Rome consultancy Policy Sonar said Meloni had to position herself vis-à-vis top EU powers Germany and France, each keen to have the bloc's third economy on their side amid rifts over addressing the energy crunch.
"She needs to leverage this status and extract some concessions in terms of fiscal leniency from the EU, as she prepares to hike the budget deficit for this year," said Galietti.
(Reporting by Gabriela Baczynska, Angelo Amante, Jan Strupczewski, Clement Rossignol; Writing by Gabriela Baczynska; Editing by Alison Williams)
S&P Global Ratings economist Beth Ann Bovino, in a post-Thanksgiving weekend report on Monday, is forecasting a recession for the U.S. next year.
NEW YORK (Reuters) -New York Federal Reserve President John Williams on Monday said the U.S. central bank needs to press forward with rate rises but did not say how fast and how far it will need to boost short-term borrowing costs, even as he reckons a rate cut is possible in 2024 as inflation pressures likely ease. "I do think we're going to need to keep restrictive policy in place for some time; I would expect that to continue through at least next year," Williams said at a virtual event held by the Economic Club of New York, noting that borrowing costs need to rise to bring down overly high levels of inflation. "I do see a point probably in 2024 that we'll start bringing down nominal interest rates because inflation is coming down."
Europe risks falling far behind competitors in many areas, including electric car manufacturing.
Although growth of the U.S. money supply is slowing, employment trends are strong, lots of cash is left over from the pandemic stimulus, and using credit cards is easy. That has put many people in a buying mood, inflation or no inflation.
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The demonstrations have cast a spotlight on the country's troubles following weeks of optimism that Beijing was moving toward steps to heal the economy.
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The Federal Reserve will likely need to keep its benchmark policy rate north of 5% for most of 2023 and into 2024 to succeed in taming inflation, said St. Louis Fed President James Bullard.
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