European Commission approves the Italian budget. The European Commission has rejected the Italian budget as expected. It is the first time that the European Union’s administrative body is using this resource.
The European Commission reports this on Tuesday.
For the next three weeks, the Italians and European drivers must still reach an agreement.
Italy must present an adjusted budget at that time.
If the government does not do this, punitive measures can follow.
Commissioner Valdis Dombrovskis (Euro) says that Monday’s Italian commentary was not enough to change the previous judgment of the European Commission.
According to Dombrovskis, Italy consciously goes against the European rules.
“If trust erodes, it destroys all member states”, according to the Latvian.
Closing more debt seems to give the illusion to break free of rules, Dombrovskis continued.
“But at some point, the blame goes too far, and at the end of the day you have no freedom at all.”
He emphasised that the debt already weighs heavily on the Italian economy.
Start of new dialogue
European Commissioner Pierre Moscovici (Financial Affairs) emphasised that the door is not closed, but that the EC wants to involve in a constructive dialogue with the Italian government.
“It is a serious moment, but not the end of the dialogue. It is the start of a new phase of dialogue.”
In recent weeks, European Commissioners and the other EU Member States have already indicated that the Italian budget does not comply with European rules.
Italy wants to run a budget deficit of 2.4 percent in 2019.
Also means that the country engages the requirement that a deficit may not exceed 3 percent,
but the Italian national debt is already at 130 percent.
Brussels wants to see more measures from the Italians to reduce this debt.
The new government of Lega Nord and the Five Star Movement is pointing to the faltering Italian economy.
Growth in the southern European country has been lagging behind the rest of Europe and the eurozone for years.
By spending more, these parties want to stimulate financial growth.