Italy economic recovery seen from mid-2013: Minister

MILAN - The Italian economy should begin to recover from a painful recession in the second half of 2013, Economy Minister Vittorio Grilli said in a newspaper interview on Sunday.

Grilli also told La Stampa daily the government would modify but not scrap a controversial tax on financial transactions, and clarified that he had no plans to carry on as minister once Prime Minister Mario Monti's term in office comes to an end.

"Our forecasts are that the recovery will start in the middle of 2013," he said.

The Rome government expects Italy's economy to shrink by 2.4 per cent this year and by 0.2 per cent in 2013.

Asked about the so-called "Tobin tax" on financial transactions, which is currently being debated in parliament, Grilli said the government would amend its proposal.

"We have studied better what the other countries will do, particularly France. There is no intention of scrapping it, but rather make it more efficient," he said.

"We shouldn't penalise any financial instrument, including derivatives," he said.

Italy was one of 11 euro zone countries that agreed last month to go ahead with the tax and wants to introduce it from Jan. 1, 2013.

The government's latest budget plan estimates proceeds from the tax will be 1.09 billion euros a year, with a tax rate of 0.05 per cent for transactions on shares and derivatives.

The proposal has been criticised in its current form by both the Bank of Italy and market regulator Consob. According to the text of the government bill, trading of shares in Italy could fall by 30 per cent and that of derivative products by 80 per cent as a result of the new levy.

Grilli told the paper that his ministerial role would "end with that of Prime Minister Monti."

Monti's government's term ends in March. He has said he will not stand as a candidate in the next elections, but he would be prepared to carry on leading the government if the poll did not produce a leader with a clear majority.