Italian budget: Brussels shows pessimism about the deficit in Rome
Vice-President of the European Commission Valdis Dombrovskis in Brussels, 20 June 2018. / & Copy AFP / Archives / JOHN THYS
The Italian public deficit is expected to increase significantly over the next two years if Rome implements the budget foreseen in 2019, rejected by Brussels, the European Commission said on Thursday.
In their autumn forecast, EU directors estimate that the Italian deficit will reach 2.9% of gross domestic product (GDP) next year, followed by 3.1% in 2020. Above forecasts in Rome, which predict 2.4% in 2019 and 2.1% the following year.
On October 23, Brussels rejected the Italian draft budget for 2019, the first in its history, judging largely beyond European nails, the data presented by the populist coalition of power, created by the League (extreme right) and the Five-Star Movement (M5S, antsystem).
In its forecast on Thursday, the Commission goes a step further, considering that these numbers are far from reality and insufficient to reduce the huge Italian debt, which in its opinion should stabilize at around 131% of GDP in two years. next years.
Italy has until November 13 to submit a revised budget, otherwise it is exposed to the opening of the "excessive deficit procedure", which may lead to financial sanctions.
The Commission also slightly lowered the growth forecast for the euro area in 2019. But it maintained its target for 2018, warning about "growing global uncertainty".
The EU authorities expect growth this year to remain stable at 2.1%, but will slightly fall to 1.9% in 2019, compared to 2.0% in the last assessment of last July. It is expected that in 2020 the growth will be slowing down to 1.7%.
"Uncertainties and risks, both external and internal, are growing and are starting to affect the pace of economic activity," said vice president Valdis Dombrovskis.
Among these threats are indications of tension in international trade, rising oil prices, but also "the prospect of slowing the improvement of the labor market situation", as well as the outcome of Brexit negotiations.
"In an increasingly precarious international environment, decision-makers in both Brussels and the national capitals must ensure that the euro area is strong enough to face the future," commented the European Commissioner for Economic Affairs, Pierre Moscovici.
(© AFP / (November 8, 2018, 11h50)