Italy Pushes Back Balanced Budget by 2 Years ROME - Prime Minister Mario Monti on Wednesday pushed back Italy's balanced budget target by a year, as a recession exacerbated by austerity measures mandated in response to Europe's sovereign debt crisis worsened. Mr. Monti's announcement came six weeks after Spain said it would not meet its own budget targets, an indication that countries across Southern Europe have had their already anemic economies contract further under the belt-tightening demanded by the European Union. "While much progress has been achieved, there's still a long way to go," the Italian cabinet said in a statement after a meeting at which it revised its three-year economic plan. Financial experts said the government's announcement Wednesday was a sign of realism, not weakness. "I think the government has simply taken the economic context into serious consideration in these predictions," said Giorgio di Giorgio, dean of the economics department at LUISS University in Rome. He and other experts say that Italy's real problem is not its deficit, already among the lowest in the euro zone, but the fact that it has not grown as much as it could for the past 20 years. "The country is not used to growing anymore," Mr. di Giorgio said. To do so, it needs important structural reforms that make the system more flexible. In my opinion, the government so far has been studying them, not implementing them. After taking office last November, Mr. Monti pushed through about €30 billion, or about $39.3 billion, in austerity measures - chief among them raising taxes and increasing the retirement age. But the effects of an enduring economic crisis are starting to show. The Italian economy has lost 335,000 jobs since January 2011, and the unemployment rate is 9.3 percent, rising to almost 32 percent for people aged 15 to 24. Mr. Monti has struggled to push through difficult changes to Italian labor law that the government and experts say are needed for Italy to return to growth and to correct a two-tier labor market in which older workers often have job protection and younger workers live on low-paying temporary contracts with little job security. "We are a short-term government called on to make enduring changes," Mr. Monti said Wednesday during a news conference in Rome. What we are doing is only the beginning of an operation that will last for many years, but that doesn't mean there will be many years without growth. Everything, everything, everything that we are doing now goes in the direction of spurring growth. A bill slowly making its way through the Italian Parliament would raise payroll taxes on full-time permanent jobs to provide more social security benefits to shorter-term contracts. The bill has been somewhat weakened from Mr. Monti's original proposal in order to meet the conflicting demands of the two largest parties supporting his government. The Democratic Left and the labor unions want to increase job protections, while the center-right party of the former prime minister, Silvio Berlusconi, and the main business organization, Confindustria, say it does not do enough to help companies hire and fire workers. The Italian government had pledged to balance the budget in 2013, but it now expects a deficit equal to 0.5 percent of gross domestic product next year, according to the cabinet statement. It added that the deficit equal to 0.1 percent previously estimated for 2013 would not be reached until 2014, while there would be no deficit only in 2015. Italy now forecasts that its economy will shrink 1.2 percent this year, before returning to growth of 0.5 percent in 2013. On Tuesday, the International Monetary Fund had even less optimistic projections. It said it believed the Italian economy would contract 1.9 percent in 2012. It added that Italy would miss its budget deficit targets both in 2012 and 2013 and would not be able to balance its the budget until at least 2017. The government said it would reach a primary budget surplus of 3.6 percent this year and 5.7 percent of gross domestic product in 2015. It said this would bring Italy's public debt to 120.3 percent of G.D.P. in 2012 - still the second highest in the euro zone, after Greece's - and 110.8 percent in 2015, taking into consideration loans Italy has provided to Greece and to a broader European rescue fund.