(09 October 2018) - The European Commission will take the unprecedented step of rejecting a national budget later this month if the Italian government does not improve its announced deficit figures.
The Commission wrote to Italy’s economic chief, Giovanni Tria, last week, expressing “serious” concerns about the national budget which plans to increase spending and deficit. Italian deputy prime minister Luigi Di Maio responded that they will “not retreat” on spending plans.
As a result, EU officials said the Commission would issue a negative opinion once Rome sends its draft budgetary plan, given the significant breach of the Stability and Growth Pact, the EU’s fiscal rulebook.
Italy announced that its deficit would reach 2.4% of GDP next year, three times higher than the target announced by the previous government. In addition, Rome does not plan any structural adjustment requested by Brussels to cut down its massive pile of public debt, which reaches 132% of GDP, second only to Greece in the EU.
Officials told EurActiv that given the risk of serious non-compliance with EU rules, the Commission will strictly follow the procedure in order to protect the credibility of the Pact. (EurActiv)