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Italy offers to lower deficit, but EU says it’s not enough

A new 2019 budget plan from the Italian government to reduce its deficit is still not enough to secure EU approval, Economic Affairs Commissioner Pierre Moscovici said on Thursday.

Published: 13 December 2018 08:51 CET
Italy offers to lower deficit, but EU says it's not enough
Italian PM Giuseppe Conte (L) shakes hands with EU Commission President Jean-Claude Juncker. Photo: Emmanuel Dunand/AFP

“It's a step in the right direction, but nonetheless I have to say we're still not quite there. There are still more steps to take,” the EU's Moscovici told French senators in Paris, after Rome's latest proposal to avoid financial penalties from Brussels.

He was speaking the day after Prime Minister Giuseppe Conte made an offer to the European Commission to lower Italy's deficit to 2.04 percent of GDP in 2019. 

The European Commission in October rejected the big-spending budget submitted for approval by the Italian coalition government of the League and the Five Star Movement. The budget includes a universal basic income of €780 for the least well-off to help them get back into the job market.

READ ALSO: Here are the main things included in Italy's 'people's budget'


Italian Prime Minister Giuseppe Conte (C) with his deputies Luigi Di Maio (L) and Matteo Salvini (R). Photo: Filippo Monteforte/AFP

After meeting with European Commission President Jean-Claude Juncker on Wednesday, Conte said that additional resources had given Italy more financial wriggle room. “Technical work allowed us to obtain a margin of negotiation because we have recovered some financial resources,” said Conte.

He said that the budget could be revised down from a proposed deficit of 2.4 percent to 2.04 percent, due to the “recovered” financial resources.

The move comes after EU officials warned Italy that a previous proposed reduction in the public deficit to 2.2 percent would still be insufficient to avoid EU sanctions.

“The European Commission will now evaluate the proposals received this afternoon. Work will continue in the coming days,” a commission spokesperson said.

READ ALSO: Italy's budget battle with Brussels: What you need to know


Photo: Gerard Cerles/AFP

If agreement is not reached, Italy could find itself the target of an EU excessive deficit procedure, which could ultimately lead to fines of up to 0.2 percent of the nation's GDP.

The offer of a budget deficit of 2.04 percent remains considerably higher than the 0.8 percent the previous centre-right government had planned.

“My government wants to keep the confidence of Italians, but it is also reasonable,” said Conte. “We have put on the table a serious and reasonable proposal and we are confident that it can be concluded, in the interests of all and in particular Italians, with a positive solution.”

In its negotiations with the EU, Italy has highlighted recent developments in France where President Emmanuel Macron's concessions to “yellow vest” protestors threaten to blow-out deficit targets.

READ ALSO: Italian government says its budget will prevent 'scenes like we've seen in Paris'

European Commissioner for Economic Affairs Pierre Moscovici on Wednesday told AFP that France and Italy would not be held to different standards on their budget deficits.

“There is no question of privileged treatment for some and exaggerated toughness for others,” Moscovici said on the sidelines of a financial conference in Frankfurt.

“The rules are the same for everybody,” he added, while noting differences in the situations between France and Italy. Italy's existing debt burden was much heavier than France's, at 130 compared with 100 percent of GDP, he said.

Brussels has said a high deficit would only add to Italy's already massive debt burden and not deliver the growth promised after years of austerity measures. 

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POLITICS

Meloni, Italy opposition head to hold unprecendented debate

Italian Prime Minister Giorgia Meloni will spar with main opposition party leader Elly Schlein in an unprecedented debate on May 23 ahead of the European elections.

Published: 11 May 2024 13:15 CEST
Meloni, Italy opposition head to hold unprecendented debate

The debate — the first ever in Italy between a sitting prime minister and the head of the opposition — will be hosted on Rai1, the flagship station of the state broadcaster.

Meloni, head of the Brothers of Italy party, has been in power since October 2022 as part of a coalition with other right-wing parties.

Partly in response to losing that year’s election, Schlein was elected to lead the opposition centre-left Democratic Party (PD) in March 2023.

Both of them are at the top of their party’s lists for the June 8-9 European elections.

Neither will take their seats in the European Parliament however with Meloni planning to stay on as prime minister and Schlein preferring to remain a member of the Italian chamber of deputies.

Recent polls put Brothers of Italy at 27 percent in the European vote and the PD at 20 percent.

Apart from both being the first women in their respective positions, the two are polar opposites.

Meloni, 46, is a skilled orator with a modest suburban background. Her party stresses Italy’s Christian roots and has put the fight against immigration on top of its agenda.

Schlein, 39, who is in a couple with another woman, comes from an academic family and also has US and Swiss nationality. She is less comfortable with public speaking than her rival.

Meloni’s party is running on a campaign slogan of “Italy is changing Europe” while Schlein has focused on problems with Italy’s healthcare system.

Negotiations over organising the debate were arduous, both teams said.

Schlein has for months accused the right-wing governing coalition of interfering with coverage at Rai, which she says has become a “government megaphone”.

Italian leaders have long been accused of meddling with Rai, but insiders say intrusions have become more pronounced under Meloni.

Rai journalists have told AFP that investigative reporters have been pushed aside, pro-government commentators promoted, and programmes critical of members of the government cancelled or watered-down.

“I have worked at Rai for 20 years but I have never felt such pressure or seen as much censorship,” Enrica Agostini, a journalist at Rai News, told the Foreign Press Association in Rome.

Some Rai journalists held a 24-hour strike this week, though most programming continued as usual thanks to a union more favourable to the government not joining.

“TeleMeloni is the fruit of imagination of the left”, Brothers of Italy said this week on X.

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