EU Commission Rejects Italy Budget

Italy is in danger of “sleepwalking into instability”.

On Wednesday, the European Commission has rejected the Italian government’s budget plan for 2019, as the country is in danger of “sleepwalking into instability”, Commission Vice-President Valdis Dombrovskis declared.

The opening of an infringement procedure for excessive deficit and the consequent sanctions, an unprecedented event in European politics, could become a reality in the next two weeks.

Italy’s draft budget plan provides for a deficit of 2,4 percent of GDP for next year. Rome argues that the measures contained in the financial manoeuvre are aimed at encouraging growth and thus dropped the Commission’s warnings about the possible effects of the planned expenditure.

Among the consequences of the sanction procedure, there could be fines of up to 0,2 percent of the GDP and a suspension of development funds. Moreover, politically, it could signal the definitive fracture in the already tense relationship between Rome and Brussels.