Long, Brussels has gemault, now The EU is to be taken Seriously:-Commission wants to force the Italian government with an excessive deficit procedure on the path of fiscal virtue.
The building of the European Commission in Brussels
The European Commission has threatened Italy because of the growing debt mountain, with a criminal case. Such an approach can be justified on the basis of the development of the public debt of the country, informed the Commission in Brussels. The obligations of the country would have achieved last year, 132,2 percent of the gross domestic product (GDP) and well above the upper limit of 60 percent. At the same time the local government in the course is debt reduction said not in the promised extent succeeded. Moreover, since the economy is growing more slowly, will worsen the ratio of debt to GDP this and next year.
The EU Finance Ministers must agree to the opening of the excessive deficit procedure, which can result in the end to a billion-dollar fine for Italy. The country escaped at the end of last year, just under a criminal case from Brussels. In Rome, a coalitions of the far-right Northern League and the left-wing populist 5-star movement has ruled since the summer of 2018.
Salvini promises dramatic tax cuts
Earlier, it was reported by the newspaper “La Repubblica”, that this Wednesday a letter to the government in Rome will be sent. It States that the lack of fiscal discipline could lead to a drastic loss of confidence in the financial markets, such as the sheet of quotes citing a draft of the letter. Therefore, the EU calls for the Commission by the government in Rome, budget cuts of three to four billion Euro, in order to avoid sanctions. The EU Commission had already sent in the last week, a Reminder letter to Rome.
Italy Prime Minister Giuseppe Conte
After weeks of disputes and the resignation threat of the party of the Prime Minister, Giuseppe Conte-free had moved, the coalition partner of 5 stars and Lega last to each other. On Tuesday, the head of the 5-star movement, Luigi Di Maio, and the Chairman of the right-wing Lega, Matteo Salvini discussed the possibility of a violation of the EU deficit rule, as the newspaper “Corriere della Sera” reported. Salvini has promised drastic tax reductions, and therefore proposes that the EU’s demands for budget discipline in the Wind. Conte insists, however, that Italy rules the Debt is to comply with the European Union. The dispute had triggered beyond the borders of Italy to Worry about financial stability.
More than 2.3 trillion euros of debt
Italy has one of the highest country in the world debts. By the end of 2018, it amounted to more than 2.3 trillion euros. This corresponds to about 132 percent of gross domestic product (GDP). In the Euro-zone to a maximum of 60 per cent are allowed. A state is, he needs to take action to get the debt in the handle. Thus, the stability of the common currency is to be backed up area. During the financial crisis, which hit Europe in 2010, brought excessive sovereign debt of the currency area to the brink of collapse and had devastating consequences for the economy and the labour market.
Italy’s Interior Minister Matteo Salvini
The way up to penalties, however, is long. After a recommendation of the EU Commission, Europe’s Finance majority must give for the initiation of the procedure the green light. This can take several years. At each major step, the approval of a majority of the member States is once again needed.
The excessive deficit procedure against Spain before the end of
At the same time, with the decision to Italy, the Commission recommended that the excessive deficit procedure against Spain. It was at the time, with the proceedings against Spain, the last of the since the financial crisis about ten years ago, opened the excessive deficit procedure set, said EU Finance Commissioner Pierre Moscovici. The debt of Spain was 2018, with 2.5 percent of the gross domestic product for the first time in more than ten years below the EU-required Three per cent mark. At the peak of the financial and debt crisis in 2009, Spain had amassed within one year more than ten percent of its GDP in new debt.
EU financial Commissioner Pierre Moscovici
During the financial crisis and in the years that followed, countries due to excessive borrowing had been instituted against 24 of the then 27 EU. So far, however, was imposed, never a fine. Was 2016 against Spain and Portugal because of years of deficit with a penalty breaches for the first time ever procedure is set in motion. The Commission and the EU Finance Ministers did then, but of fines. This was justified with the difficult economic and social situation. The Federal government had initially insisted on a reduction of Structural support, but finally.
sti/pg (afp, dpa, rtr)