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Italy's economy minister expects hard negotiations on new EU debt rules

FILE PHOTO: Italian PM Meloni and deputy PM Tajani attend a swearing-in ceremony at the Quirinale Palace, in Rome

ROME (Reuters) - Italy expects a proposal from the European Commission on how to change EU debt rules will trigger widespread criticism across the bloc, its new economy minister said on Wednesday.

"I can already imagine that the reform will meet opposition," Economy Minister Giancarlo Giorgetti told a panel of lawmakers on Wednesday.

The European Commission proposed to change the EU's fiscal rules so that governments would negotiate individual debt reduction paths of a length linked to reforms and investments.

The current rule is that euro zone countries must cut debt every year by 1/20th of the excess above 60% of GDP - a tall order for Italy with debt of around 150% of GDP or Greece with 186%.

Under the EU executive's proposal, instead of the current one-size-fits-all rule, each country would agree its own four-year debt reduction path with the Commission and get other EU finance ministers to sign off on it.

The four years could be extended to seven, if the extra time was justified by investment and reforms.

"Some like us will consider it excessively prescriptive towards over-indebted countries, others like the Nordic countries will find it unnecessarily lax. There will be a difficult negotiation," he added before Brussels formalised its proposal.

Giorgetti said Italy's public debt, proportionally the highest in the euro zone after Greece's, was targeted to fall steadily from the 150.3% of GDP level registered in 2021 to 141.2% in 2025.

(Reporting by Giuseppe Fonte; Editing by Keith Weir; Editing by Keith Weir)