FILE PHOTO: Interior Minister Matteo Salvini speaks to the media at the Senate in Rome, Italy November 6, 2018.  REUTERS/Remo Casilli/File Photo
 Interior Minister Matteo Salvini speaks to the media at the Senate in Rome. REUTERS

Italy on brink of sanctions over EU budget dispute


The National

The European Union on Wednesday began a push to discipline Italy over its draft 2019 budget plan, which Brussels described as a “particularly grave” violations of the fiscal rules that underpin the euro.

Despite the development, the currency held firm on the foreign exchanges, buoyed by a suggestion in La Stampa newspaper that the Italian right-wing Matteo Salvini was open to discussions over a compromise with the EU over the stand-off. The currency was trading up almost half-a-per cent above $1.14 in the hours after the announcement.

The expansionary budget plan, which raises the deficit to 2.4 per cent of the gross domestic product, is considered to be in non-compliance with the rules by the European Commission.

Brussels’ rejection on Wednesday formally deepens the rift with Rome's populist government and paves the way for unprecedented sanctions.

EU member states now have two weeks to decide whether to allow the commission to trigger the excessive deficit procedure, a months-long process that could lead to fines.

The procedure allows Rome the opportunity to negotiate and correct its plan before Brussels can inflict a sanction that can come as high as 0.2 per cent of Italy's GDP.

__________________

Read more:

European Commission rejects Italy's budget over debt fears

Europe’s divisive politics play out in the drive for peace in Libya

__________________

"With what the Italian government has put on the table, we see a risk of the country sleepwalking into instability," Commission Vice President Valdis Dombrovskis told a press conference in Brussels.

"We conclude that the opening of a debt-based excessive deficit procedure is... warranted," he added, referring to the EU's official process to punish member states for overspending.

The commission already rejected Italy's 2019 budget last month in a first for the EU, giving Italy the chance to backtrack.

“We won’t play sly foxes with the deficit,” Luigi Di Maio. Five Star Movement (M5S) leader and deputy prime minister, said as the deadline to revise the budget plan expired on November 13. “But at the same time we will maintain commitments to Italians made in the government contract. There will be all the cuts of waste, cuts of useless military spending and there are the social measures to give back social rights to Italians.”

Brussels instead forecasts Italy's deficit will reach 2.9 per cent of GDP in 2019 and hit 3.1 per cent in 2020, in breach of the EU's 3.0 per cent limit.

For the coalition government, made up of  Mr Salvini's League and M5S, an expansionary budget would help kickstart the stagnating economy and fulfil electoral promises including a universal basic income and lowering retirement age.

The Commission rejects Rome's argument that by expanding the budget it can boost economic growth and revenues.

Mr Salvini, who serves as deputy prime minister, has so far been scornful of EU reprimands. "Has the EU letter arrived? I am also waiting for Santa Claus," he said, referring to his back-and-forth with Brussels.

But market shakeups could perhaps push Italy to reconsider its position or even split the governing coalition. The spread reached 316 basis points Wednesday, down from 326 late on Tuesday. Since May – when negotiations to form the coalition government in Rome began – this figure has more than doubled, but it has kept below the 400 mark that Italy argues is the danger zone.

Italy's debt, at more than 130 per cent of GDP, is proportionally the second highest in the euro zone after Greece's.

Company Profile

Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
Investors: Family offices

Points about the fast fashion industry Celine Hajjar wants everyone to know
  • Fast fashion is responsible for up to 10 per cent of global carbon emissions
  • Fast fashion is responsible for 24 per cent of the world's insecticides
  • Synthetic fibres that make up the average garment can take hundreds of years to biodegrade
  • Fast fashion labour workers make 80 per cent less than the required salary to live
  • 27 million fast fashion workers worldwide suffer from work-related illnesses and diseases
  • Hundreds of thousands of fast fashion labourers work without rights or protection and 80 per cent of them are women
How to come clean about financial infidelity
  • Be honest and transparent: It is always better to own up than be found out. Tell your partner everything they want to know. Show remorse. Inform them of the extent of the situation so they know what they are dealing with.
  • Work on yourself: Be honest with yourself and your partner and figure out why you did it. Don’t be ashamed to ask for professional help. 
  • Give it time: Like any breach of trust, it requires time to rebuild. So be consistent, communicate often and be patient with your partner and yourself.
  • Discuss your financial situation regularly: Ensure your spouse is involved in financial matters and decisions. Your ability to consistently follow through with what you say you are going to do when it comes to money can make all the difference in your partner’s willingness to trust you again.
  • Work on a plan to resolve the problem together: If there is a lot of debt, for example, create a budget and financial plan together and ensure your partner is fully informed, involved and supported. 

Carol Glynn, founder of Conscious Finance Coaching

Our legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

SERIE A FIXTURES

Saturday

AC Milan v Sampdoria (2.30pm kick-off UAE)

Atalanta v Udinese (5pm)

Benevento v Parma (5pm)

Cagliari v Hellas Verona (5pm)

Genoa v Fiorentina (5pm)

Lazio v Spezia (5pm)

Napoli v Crotone (5pm)

Sassuolo v Roma (5pm)

Torino v Juventus (8pm)

Bologna v Inter Milan (10.45pm)

Specs

Power train: 4.0-litre twin-turbo V8 and synchronous electric motor
Max power: 800hp
Max torque: 950Nm
Transmission: Eight-speed auto
Battery: 25.7kWh lithium-ion
0-100km/h: 3.4sec
0-200km/h: 11.4sec
Top speed: 312km/h
Max electric-only range: 60km (claimed)
On sale: Q3
Price: From Dh1.2m (estimate)

A Long Way Home by Peter Carey
Faber & Faber

A QUIET PLACE

Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou

Director: Michael Sarnoski

Rating: 4/5

THE SPECS

Engine: 6.0-litre, twin-turbocharged W12

Transmission: eight-speed automatic

Power: 626bhp

Torque: 900Nm

Price: Dh1,050,000

On sale: now


View from London

Your weekly update from the UK and Europe

      By signing up, I agree to The National's privacy policy
      View from London