The focus of European policy is now on economic growth rather than on austerity measures, as this was agreed by European leaders under the pressure exercised by Italy and Matteo Renzi.

During the summit meeting the EU leaders decided to apply the EU fiscal rules under the Stability Pact with greater flexibility in order to support economic growth.

According to the decision, structural reforms which boost growth will be taken into account when assessing fiscal discipline, so that countries can take much more time to achieve their financial goals if they have implemented such reforms.

The agreement is a success for the Italian Prime Minister Renzi, who was pushing for a more lenient implementation of the Stability Pact after he was elected in February. Having the largest debt in the Eurozone, Italy desperately needs to boost its country’s growth, in order to be able to reduce it.

As it is known, the Stability Pact asks all governments to keep deficits below 3% of GDP and debt to 60%.