European Commission requests Italy to submit a revised draft budget

Photo: EPA EC Vice-President in charge of the Euro and social dialogue Valdis Dombrovskis

European Commission announced on Tuesday that it has requested Italy to submit a revised draft budgetary plan for 2019 within three weeks. The European Commission has identified in the draft budgetary plan submitted by Rome a particularly serious non-compliance with the fiscal recommendation, addressed to Italy by the Council on 13 July 2018.

The plan also was not in line with the commitments presented by Italy in its Stability Programme of April 2018. This is the first time that the Commission has requested the presentation of a revised draft budgetary plan, the Commission press service noted.

“It is our job and duty to uphold common interest and mutual commitments taken by the member countries. Italy's debt is among the highest in Europe, and Italian taxpayers spend about the same amount on it as on education. In this spirit, we see no alternative but to request the Italian government to revise its draft budgetary plan for 2019, and we look forward to an open and constructive dialogue in the weeks to come," Commission's Vice-President Valdis Dombrovskis says. Pierre Moscovici, Commissioner for Economic and Financial Affairs notes that the Commission wishes to continue the dialogue with the Italian authorities.

The Commission's assessment of the draft budgetary plan points to a planned significant deviation from the fiscal path recommended by the Council in July that recommended Italy to make a structural improvement of 0.6% of GDP. The draft budgetary plan presented by Italy instead provides for a structural deterioration amounting to 0.8% of GDP in 2019. Both the fact that the draft budgetary plan provides for a fiscal expansion of close to 1% of GDP, while the Council had recommended a fiscal adjustment, and the size of the deviation (a gap of around 1.4% of GDP or €25 billion) are unprecedented in the history of the Stability and Growth Pact, the Commission says.

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