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Italy on collision course with Brussels over its budget plans

Thursday, 18 October, 2018 - 20:17

Brussels has entered into a stand-off with the populist government in Italy, officially demanding “clarifications” from Rome for after it announced plans to increase spending in it budget rather than cutting expenditure. Like all countries in the euro area, Italy sent its draft budget for 2019 to the European executive. In a letter to Rome, the Commission asked Italy to submit its comments before “Monday, 22 October at noon”. Brussels denounced a risk of “serious non-compliance” with European rules, which could lead it to reject the budget, which has never happened in the history of the EU.

The fiscal outlook presented, with a public deficit at 2.4 percent of GDP, is far removed from the 0.8 percent promised by the previous centre-left government. Rome aims to boost growth through stronger demand and more investment.

The other euro-zone countries, subject to the same budgetary rules, closely watching the exchanges between Italy and the Commission, challenged by the Italian government, made up of the far-right League party and the anti-establishment 5-star movement.

“We knew that this budget, designed to meet the demands of Italian citizens, long ignored, was not in line with the expectations of the European Commission. So we were expecting comments,” Italian Council President Giuseppe Conte said on Facebook. Referring to a “normal” exchange between the Commission and the Member States, he stressed that Italy would not be the only one to receive a letter. According to several sources, Spain, France, Portugal and Belgium could also receive one, but in their case it would be a simple request for information.

The Italian budget is “well thought out, well built and well done,” said Conte, who has already warned that there is no room for him to change it. “Dialogue does not scare us if it is constructive and useful, and without prejudice,” he insisted. “We do not harbor any kind of negative prejudice,” said the President of the European Commission, Jean-Claude Juncker.



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