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BCN-21
ITALY-EU-ECONOMY
Italy ducks EU disciplinary action on deficit
BRUSSELS, July 4, 2019 (BSS/AFP) – The European Commission said Wednesday
it has for now decided against taking disciplinary action against Italy over
its high public deficit after the government in Rome pledged to rein it in.
“The Commission concluded that an excessive deficit procedure against
Italy by virtue of the debt is not justified at this stage,” Economics
Commissioner Pierre Moscovici said.
The decision by the commission, the EU’s executive arm, comes after
Italian Prime Minister Giuseppe Conte said his country’s public deficit is
“perfectly on track” to reach 2.04 percent of gross domestic product in 2019.
At the start of June, Brussels formally put Italy on notice about its
deteriorating deficit and snowballing debt and opened an excessive deficit
procedure which could result in an unprecedented fine of more than 3.0
billion euros ($3.4 billion) for the country.
The European Commission in October rejected the big-spending budget
submitted for approval by the Italian coalition government of the far-right
League and the anti-establishment Five Star Movement.
Rome and Brussels then agreed on the 2.04-percent figure in December, but
the Italian government was forced to raise the forecast to 2.4 percent in
March given the deteriorated economic outlook.
The cabinet calculated at a budget meeting late Monday that some 6.24
billion euros ($7.0 billion) of additional revenues would now be coming in
this year, while expenditure would rise only by an extra 130 million euros.
Furthermore, a huge chunk of money earmarked for early retirement payments
and a citizens’ income for the less well-off has been frozen due to lower
than expected demand.
So, the overall deficit for this year would be around 7.6 billion euros
lower than anticipated, the cabinet said in a statement late Monday.
BSS/AFP/HR/1038