Only muted criticism of the Euro-Finance Ministers in Italy’s debt-to-household. The deadline for required Changes to be running. And Vice-head of the government, Di Maio recommends that even a lot of debt as a recipe for the whole EU.
EU monetary Affairs Commissioner Pierre Moscovici is in front of the Meeting of the Euro group, unbending: It’s not going to be “a kind of Deal” in the budget dispute between Brussels and the government in Rome. “These are not negotiations. The rules are the rules and must be respected”. The EU Commission had pointed to the end of October for the first Time in its history, the Italian draft budget as a precaution. Italy plans to raise by tax cuts and social blessings of the debt, contrary to the European rules more solid.
Rom exercises continue the resistance
The Minister of Finance of Austria must now explain to his colleagues what he should do, asked Moscovici. Officially, the period to which he would have an amended Budget in accordance with the demand from Brussels, to present be up and running until 13. November. Until then, however, Moscovoci want to rely on “dialogue and again dialogue.” And he avoids, like others, any mention of possible consequences.
Of course, the EU Commission knows that it is not the serious business expert, Giovanni Tria, the Minister of the interior Matteo Salvini of the Lega and 5-star Chef Luigi Di Maio, who designed the planned debt-to-household. Both gave themselves in the last few weeks consistently. And Vice-Premier Di Maio to put even and recommended on Monday in an Interview with the “Financial Times”, a strong debt-to-do recipe, to increase the growth anywhere in the Eurozone.
One is to follow Donald trump’s economic policy, said of the 5-star-politicians, the have with tax cuts and expansionary spending policies, growth in the USA boosted. The European voters would not accept the eternal austerity: “If the recipe works here [in Italy], then you will at EU level to say, we should apply the Italian recipe in all countries”.
Debt, like the USA, Luigi di Maio holds make for the right recipe and in the EU
Di Maio believes that Italy could grow out of its debt. His government expects about 1.5 percent growth for the next and for the coming years. The statisticians in the Ministry of Finance in Rome, in contrast, less than 1 percent. And in fact, the economy has fallen, growth since the inauguration of the populist government virtually to Zero. However, Di Maio swears that they wanted to blow up, neither the Eurozone nor the Euro emerge.
Serious reminders of the colleagues
It would be “manner”, declared the French Finance Minister, Bruno Le Maire, if Italy take the outstretched Hand of the EU Commission and in dialogue with her would occur. “What is at stake here is the stability of the common currency,” stressed the Frenchman. You have to find a solution and still had enough time to do that. Neither he nor his colleagues are going to speak currently to punitive measures against Rome. But the seriousness of the Appeals is not in doubt: “The Euro is a protection against the unrest in the financial market,” added Le Maire, a note to Rome, that without the stable Basis of the common currency, the Italian debt problems are much more serious.
The Austrian Finance Minister, Hartwig Löger is less diplomatic: “These principles [of the Italian household] are not acceptable to us. It gives great astonishment of my colleagues about how Italy behaves”. The government in Rome would now say, whether and how it wants to change something and he hope, Löger, that reason will prevail.
Also his Slovak colleague Peter Kazimir, it is clear to Rome: “Italy’s Behavior is jeopardizing our plans” for deeper Integration in the Eurozone.
The Frenchman Bruno Le Maire and the Federal Finance Minister, Olaf Scholz, criticize Italy behavior
Federal Finance Minister Olaf Scholz wants to make Berlin a target for the populists in Rome, and chooses his words carefully. But the message is clear: For highly-indebted countries, the funding of current expenditure was the biggest Problem. And since Italy would have to be 130 percent a lot more cautious than others. This is the exact opposite of what propagate Di Maio and his coalition partners.
And for the Euro Commissioner Valdis Dombrovskis, added that Italy respect the rules of the Euro zone is open to abuse. “We expect them to reduce the debt by 0.6 percent, do you want to increase by 0.8 percent”. The consequences would also hold already on the level of companies and in-house leakage that would have problems with the borrowing, which slows down the Italian economy.
The EU Commission Pierre Moscovici is in a tight spot in the budget dispute with Italy
Open discussion avoid
If Rome is not thrown until the middle of the month, which is rather to be expected, must react to the EU Commission. It proposes to open an excessive deficit procedure, could be met at the end of high money. At the beginning of December the Euro will have to deal-the Minister of Finance with the Budget of Italy. Yet you want to pour no discernible Oil on the fire, and the open confrontation with the populist government in Rome to avoid.
On the other hand, the Commission may pursue in Brussels are hardly different than your course. After it has determined that “the rules are the rules”, would lose their credibility if the Italian draft budget would remain without consequences.
We may want to adjourn the quarrel to the new year, because the December summit, it will go to a handful of decisions to Reform the Eurozone, which would otherwise be the potential for Blackmail. It is clear that the Northern countries, which have joined under the name of “Hanse”, the request in view of the conflict with Rome is already more control over the national Budget and the provisions of the community currency are likely to want to exacerbate.
In Brussels, one hopes, probably in the medium term on the disciplinary effect of the financial market. The credit rating Agency Moody’s has put the Italian credit rating to a step above junk, by Standard & Poor’s lowered the Outlook to “Negative”. The so-called Spread, the difference in the financing of government bonds measured on the basis of the value of Germany is increased already sensitive, but has not reached any critical level. The next weeks will show whether the government in Rome by the rise in its credit cost to comply could be forced.