Saturday, 17 November, 2018

Italy to respond to European Union in time-PM office - English

Matteo Salvini stands next to a sniper rifle during an event involving the state police SWAT team in Rome Matteo Salvini stands next to a sniper rifle during an event involving the state police SWAT team in Rome Credit Remo Casilli REUTERS
Melinda Barton | 21 October, 2018, 17:51

A recent report from the European Commission found that Italy's budget had deviated from Brussels' joint budget rules that mandate budget deficits should be below 3 percent of each member-state's GDP, while total debt burden should not exceed 60 percent of the GDP.

Italy's premier, Giuseppe Conte, told reporters in Brussels that the budget did not need to be changed, just explained to the commission members.

The EU criticism came after Italy's populist government, a coalition of the Five Star Movement and League parties, set the 2019 deficit target at 2.4 percent, which spooked investors.

The EU presidency says it "is really, really decisive" for Italy to change its draft budget because otherwise Italy would not only threaten its own financial health for also that of its eurozone partners.

"There is no discrimination against Italy", Moscovici said during a press conference alongside Tria.

Italy's ruling coalition patched up a row over a tax amnesty on Saturday and struck a more conciliatory tone towards European Union institutions, saying it wanted to discuss its budget plans with Brussels.

Italy is the Eurozone's third-largest economy, and its budget problems are felt across the bloc to a far greater extent than, for example, the debt problems in Greece back in 2015. The draft Italian budget is extremely concerned in Brussels. The European Commission complained that the latest Italian budget violates EU budget rules, with government spending and sovereign debt both increasing which would result in the Italian government's inability to reduce public debt in accord with EU regulations.

At the summit, Austrian Chancellor Sebastian Kurz said fiscal rules should be respected by all, adding: "Too much debt is unsafe".

The Italian government intends to temporarily increase the fiscal deficit for the fulfillment of social promises (reduction of the retirement age, the introduction of the "income of citizenship", the abolition of the Value-Added Tax increase).

Juncker said: "I had some colleagues on the phone say they don't want us to add flexibility to already existing flexibility".

Di Maio alleges that the draft budget contained unauthorized language extending a tax amnesty to Italians' assets overseas, a measure that the 5-Star Movement says would benefit organized crime or tax cheats hiding money overseas.

Luigi Di Maio told a late-night talk show that the draft presented to the Italian president contained a proposal to extend a tax amnesty on money held overseas and brought back to Italy. He denied a rift in the governing coalition.

Rutte said in a statement that he expressed Dutch concerns regarding Italy's budget plans and said he was giving "full support" to the European Commission, which is vetting the draft after having expressed its skepticism.