EU budget row: Italy sends Brussels dire warning and condemns rules – 'Is someone afraid?'

Posted on Jun 19 2019 - 7:42pm by admin

Prime Minister Giuseppe Conte said Rome will accept the bloc’s fiscal rules but will battle to have them adapted so the member state can allow for more public investment and stronger growth. Mr Conte said ahead of tomorrow’s EU summit: “We are determined to avoid an EU infringement procedure and we are convinced about our economic policies.” He also said that “Italy intends to respect EU rules”, before adding the budget should be revised to ensure “balance between stability and growth and (between) the reduction of risks and the sharing of risks”.

The comments follow news Rome is struggling to avoid EU action over its rising debt, which is the highest in the Eurozone’s after Greece’s due to 132 percent of gross domestic product (GDP).

Mr Conte said he was in support of a resolution put forward by Italy’s coalition of right-wing League and anti-establishment Five Star Movement, which would see Rome put forward changes to the rules from Brussels.

This resolution was tabled and passed the lower house with 287 votes to 188.

The motion demands “the exclusion of productive investments, including those in human capital” from deficit calculations.

It also calls for “the revision of reference to the structural balance”.

This will attempt to strip out the effect of economic growth fluctuations on countries’ budgets.

But the calculation method used has been heavily criticised by many economists.

The formula works by using EU member states’ past performances in growth to determine their future potential, or non-inflationary or growth rate.

League leader Matteo Salvini said: “Maybe someone in Europe is afraid of Italy growing more.

“Some European norms and constraints were deliberately drawn up to help Berlin and Paris and cheat all the others.”

Mr Conte will use tomorrow’s summit in Brussels to plead with European Commission President Jean-Claude Juncker and EU leaders to scrap action against Italy.

Legal proceedings would need to be given the rubber stamp by leaders in a vote. This is expected to take place before the summer break on July 8-9.

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