A Eurogroup meeting in Brussels on November 5 saw the EU’s finance ministers throw their support behind the European Commission’s decision to reject Italy’s draft budget plan for 2019 and urge the Italian government to revise its budget plans and bring them in line with European spending rules.
Both Eurogroup President Mario Centeno and French Finance Minister Bruno Le Maire said the European Commission had taken the right course by giving Italy the opportunity to change course and abide by Brussels’ demands before a mid-November deadline that could see the Italian government either back down or escalate a stand-off with EU officials.
“This is a dialogue between the Commission and Italy. The Commission has rejected the Italian budget and now it is up to Italy to respond,” said Dutch Finance Minister Wopke Hoekstra.
Italy has until November 13 to send a revised plan for 2019 that must comply with the European Union’s spending limitations after the first draft was rejected by the Commission after Brussels said the draft budget violated commitments by the previous Italian government to bring down the country’s high level of public debt.
Italy is the fourth-largest economy in Europe, but its debt load is the second highest after Greece. Many are concerned that Europe would be subjected to unprecedented financial turmoil if Italy were to lose control of its finances. The six-month-old anti-establishment Italian government, however, has insisted that a sharp increase in spending is needed to jumpstart the country’s sluggish economic growth.
European Commissioner for Economy and Finance Pierre Moscovici that the cost of servicing Italian public debt is already equal to the country’s entire spending on education – €65 billion a year, before adding that the Commission and the Italian government are not currently involved in negotiations on a compromise regarding a revised budget.
“No, we’re not negotiating. We’re not in any discussions. The rules are the rules,” said Moscovici.