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Italy escapes EU sanctions over massive public debt

The European Commission said on Wednesday it has for now decided against taking disciplinary action against Italy over its high public deficit after the government in Rome pledged to rein it in.

Published: 3 July 2019 16:07 CEST

Italy escapes EU sanctions over massive public debt

Italy's finance minister Giovanni Tria (L) with European Affairs Commissioner Pierre Moscovici in October 2018. Photo: Alberto Pizzoli/AFP

“The Commission concluded that an excessive deficit procedure against Italy by virtue of the debt is not justified at this stage,” Economics Commissioner Pierre Moscovici said.

The decision by the commission, the EU's executive arm, comes after Italian Prime Minister Giuseppe Conte said his country's public deficit is “perfectly on track” to reach 2.04 percent of gross domestic product in 2019.

READ ALSO: Italy insists it's 'on track' to avoid EU budget fines

Italiam Prime Minister Giuseppe Conte. Photo: Bertrand Guay/AFP

At the start of June, Brussels formally put Italy on notice about its deteriorating deficit and snowballing debt and opened an excessive deficit procedure which could result in an unprecedented fine of more than €3 billion for the country.

The European Commission in October rejected the big-spending budget submitted for approval by the Italian coalition government of the hard-right League and the anti-establishment Five Star Movement.

Rome and Brussels then agreed on the 2.04-percent figure in December, but the Italian government was forced to raise the forecast to 2.4 percent in March given the deteriorated economic outlook.

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The cabinet calculated at a budget meeting late Monday that some €6.24 billion of additional revenues would now be coming in this year, while expenditure would rise only by an extra €130 million. Furthermore, a huge chunk of money earmarked for early retirement payments and a citizens' income for the less well-off has been frozen due to lower than expected demand.

So the overall deficit for this year would be around €7.6 billion lower than anticipated, the cabinet said in a statement late on Monday.

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Italian PM Meloni to stand in EU Parliament elections

Meloni’s Brothers of Italy party, which has neo-Fascist roots, came top in Italy’s 2022 general election with 26 percent of the vote.

It is polling at similar levels ahead of the European elections on from June 6-9.

With Meloni heading the list of candidates, Brothers of Italy could exploit its national popularity at the EU level, even though EU rules require that any winner already holding a ministerial position must immediately resign from the EU assembly.

“We want to do in Europe exactly what we did in Italy on September 25, 2022 — creating a majority that brings together the forces of the right to finally send the left into opposition, even in Europe!” Meloni told a party event in the Adriatic city of Pescara.

In a fiery, sweeping speech touching briefly on issues from surrogacy and Ramadan to artificial meat, Meloni extolled her coalition government’s one-and-a-half years in power and what she said were its efforts to combat illegal immigration, protect families and defend Christian values.

After speaking for over an hour in the combative tone reminiscent of her election campaigns, Meloni said she had decided to run for a seat in the European Parliament.

READ ALSO: How much control does Giorgia Meloni’s government have over Italian media?

“I’m doing it because I want to ask Italians if they are satisfied with the work we are doing in Italy and that we’re doing in Europe,” she said, suggesting that only she could unite Europe’s conservatives.

“I’m doing it because in addition to being president of Brothers of Italy I’m also the leader of the European conservatives who want to have a decisive role in changing the course of European politics,” she added.

In her rise to power, Meloni, as head of Brothers of Italy, often railed against the European Union, “LGBT lobbies” and what she has called the politically correct rhetoric of the left, appealing to many voters with her straight talk.

“I am Giorgia, I am a woman, I am a mother, I am Italian, I am a Christian” she famously declared at a 2019 rally.

She used a similar tone Sunday, instructing voters to simply write “Giorgia” on their ballots.

“I have always been, I am, and will always be proud of being an ordinary person,” she shouted.

EU rules require that “newly elected MEP credentials undergo verification to ascertain that they do not hold an office that is incompatible with being a Member of the European Parliament,” including being a government minister.

READ ALSO: Why is Italy’s government being accused of helping tax dodgers?

The strategy has been used before, most recently in Italy in 2019 by Meloni’s deputy prime minister, Matteo Salvini, who leads the far-right Lega party.

The EU Parliament elections do not provide for alliances within Italy’s parties, meaning that Brothers of Italy will be in direct competition with its coalition partners Lega and Forza Italia, founded by Silvio Berlusconi.

The Lega and Forza Italia are polling at about seven percent and eight percent, respectively.

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