Italy wants EU 'flexibility' over budget
November 14 2018 12:21 PM
Interior Minister Matteo Salvini
Interior Minister Matteo Salvini

AFP/Milan

Italy's populist government said the EU must show flexibility over its big-spending budget because the country had to cope with a series of natural disasters, including floods and a deadly bridge collapse in Genoa.

According to a copy of a letter sent Tuesday to Brussels insisting there would be no budget changes, the government said the EU should show ‘flexibility given exceptional events... (and) exceptional spending.’

About 30 people died in storms and floods in Italy early this month, mainly in the northeast.

A total of 43 people were also killed when a decades-old bridge in the port city of Genoa collapsed in August, a disaster that stunned and angered the country and forced authorities to launch a maintenance plan for the road network.

Economy Minister Giovanni Tria told Brussels that over the next three years, making good the damage caused would cost the government about 0.2 percent of Gross Domestic Product (GDP).

The government earlier defied the European Commission -- which rejected the budget outright last month in a first for the EU -- and said it would not abandon its big-spending plans aimed at getting the stalled economy moving again.

‘The budget will not change, neither in its balance sheet nor in its growth forecast. We have the conviction that this is the budget needed for the country to get going again,’ Italian Deputy Premier Di Maio, who leads the anti-establishment Five Star Movement (M5S), said late Tuesday.

M5S and its coalition partner, the far-right League party, insist the budget will help kickstart growth in the eurozone's third largest economy and reduce the public debt and deficit.

The Commission had given Italy until Tuesday to make changes to its 2019 plans and warned non-compliance could activate the ‘excessive deficit procedure’ (EDP), a complicated process that could lead to fines and possibly provoke a strong, adverse market reaction.

Italy intends to run a public deficit of 2.4 percent of gross domestic product in 2019 -- three times the target of the government's centre-left predecessor -- and one of 2.1 percent in 2020.

Brussels forecasts Italy's deficit will reach 2.9 percent of GDP in 2019 and hit 3.1 percent in 2020 -- breaching the EU's 3.0 percent limit.



There are no comments.

LEAVE A COMMENT Your email address will not be published. Required fields are marked*
MORE NEWS