Monday, 29 November 2021

EU: the battle of the Italian budget against the eurozone

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LONDON: Eurozone finance ministers, meeting in Brussels on Monday, are expected to support the European Commission two weeks after its decision to reject the budget of the populist coalition in power in Italy.

“Everyone is worried,” says a senior European official, who observes wary of the standoff between the Commission, guarantor of EU budget rules, and Rome, determined to defend its budget 2019, yet completely outside the nails.

According to several sources, the 19 ministers of the euro zone (the Eurogroup) should generally support the Brussels approach, which rejected the Italian draft budget on 23 October, a first in its history, lambasting “a clear, clear deviation , assumed “in relation to European rules.

In question: the deficit of 2.4% of gross domestic product (GDP) for 2019 presented by the populist coalition in power in Rome, formed by the League (far right) and the Five Star Movement (M5S, antisystem), very above what was foreseen by the previous center-left government (0.8%).

Italy has until 13 November to provide a revised budget, otherwise it will be exposed to an “excessive deficit procedure”, which could lead to financial sanctions.

“It will be inevitable” if nothing changes, promises a European source.

The Commission “can continue to count on the support of France,” says a French source, who hopes Monday “a serene but frank debate.”

Italian President Sergio Mattarella, who has few powers but a respected authority, called on the government to “develop a constructive dialogue with the European institutions”.

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