Start Europe Budget dispute: EU now wants to examine the new Italian proposal

Budget dispute: EU now wants to examine the new Italian proposal

10.12.2018, Italien, Rom: Matteo Salvini, Innenminister und stellvertretender Premierminister von Italien, spricht vor Journalisten der Auslandspresse. Italiens rechtspopulistischer Vize-Premierwünscht sich für das Wohl Europas eine deutsch-italienische «Achse». Foto: Lena Klimkeit/dpa +++ dpa-Bildfunk +++

In the face of a looming excessive deficit procedure, Italy has turned in the budget dispute with the EU: The government in Rome proposed on Wednesday a reduction of the planned deficit to 2.04 percent in the coming year. The government had „regained some financial resources,“ said Prime Minister Giuseppe Conte after a meeting with European Commission President Jean-Claude Juncker . The EU now wants to examine the new Italian proposal.

The additional resources have created new scope for negotiation with Brussels, Conte said. Italy submitted a „serious and reasonable proposal“. He was confident that he would come to an agreement „in the interest of all, and especially of the Italians“.

A Commission spokeswoman said after the meeting of Juncker and Conte of „good progress“. The proposals would now be examined. The work will continue in the coming days.

The reigning government of the populist five-star movement and the xenophobic Lega Party, which has been in office since June, wants to end the austerity measures of its predecessors, despite the already enormously high level of total debt. It had originally planned with a deficit of 2.4 percent of gross domestic product (GDP) in the 2019 budget. The new debt would have been three times as high as promised by the previous government to Brussels.

EU: „A particularly serious infringement“

The EU Commission found this to be „a particularly serious breach“ of EU recommendations and for the first time ever rejected a Member State’s draft budget in October. In November, she paved the way for an excessive deficit procedure against Italy, which could lead to billions in fines for Rome or the removal of EU aid.

The Italian government initially refused to make any corrections to the budget despite the impending penalties. Only after a first meeting between Conte and Juncker in late November came motion in the dispute.

France is a problem child – „The rules are the same for everyone“

Meanwhile, Italy’s deputy prime minister Matteo Salvini warned the European Commission against treating his country differently than France. It should not be measured with two dimensions, he said, referring to the talks between Paris and Brussels and the actions of the European Commission against Rome.

In France, President Bill Emmanuel Macron’s billionaire promise to the “ yellow vests “ protest movement could push the budget deficit above the EU ceiling of three percent next year. „The rules are the same for everyone,“ EU Economic Affairs Commissioner Pierre Moscovici said on Wednesday at news agency AFP on the sidelines of a conference in Frankfurt.

„There will be no preferential treatment for some and exaggerated hardship for others,“ affirmed the French EU Commissioner. He also showed understanding for the government in Paris. Brussels understands that a government is forced to act under pressure from social movements and major challenges.