By Francesco Canepa and John Geddie
LONDON (Reuters) - Italy does not need to renegotiate the pace of debt reduction stipulated under the European Union fiscal compact, Economy Minister Pier Carlo Padoan said on Tuesday.
Earlier this month, Italy raised the target for its huge public debt to 134.9 percent of output this year. European Union members must reduce the amount by which the public debt exceeds the EU ceiling of 60 percent of GDP by one twentieth per year as part of the fiscal compact agreed in 2012.
"Italy does not need to renegotiate anything," he said in response to a question after a lecture in London.
During the lecture, Padoan called for a more gradual approach to fiscal consolidation in the euro zone and said monetary policy will have a crucial role to play in stimulating a fledgling economic recovery in the currency bloc.
Padoan said there was space for both fiscal and monetary policies to support growth, while private sector investment was also a key element.
"While the direction of fiscal policy needs to be kept, maybe the speed and profile of fiscal policy can be adjusted," Padoan said.
He also said the European Central Bank should have the option of using a programme of asset purchases known as quantitative easing (QE), which is designed to help tackle stubbornly low inflation and support growth.
Padoan warned, however, that the implementation of such a programme would prove difficult.
"I think QE should be, and has been, included in the tool box of the central bank but that is not easy to implement because of the specificities of (a) euro zone that is still not fully integrated," he said.
ECB chief Mario Draghi told lawmakers from Germany's ruling coalition on Monday that QE was still some way off, according to a source who took part in the meeting.
Padoan's talk came ahead of Italy taking the presidency of the EU for six months from July 1.
(Reporting by Francesco Canepa and John Geddie; Editing by Robin Pomeroy)