Italy should cut its public debt level and enact structural reforms to boost employment and growth, the EU's Economic and Monetary Affairs Commissioner Olli Rehn said in Rome today.

The commissioner also however praised Italy's "prudent" fiscal stance during the economic and financial crisis and said the European Commission was forecasting Italy would return to pre-crisis economic growth rates by 2012.

Rehn was speaking to Italian lawmakers and was set to hold talks later with Finance Minister Giulio Tremonti, who has proposed the creation of eurozone bonds as a way out of the current sovereign debt crisis in Europe.

"Italy has a double challenge" -- first of all to reduce its public debt to GDP ratio to 60 percent as stipulated by the European Union and also to implement structural reforms in its economy, Rehn told lawmakers.

Italy has one of highest public debt levels in the world -- at around 120 percent of gross domestic product (GDP).

It has also repeatedly put off important structural reforms such as cutting red tape and overhauling the labour market.