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Debt States: EU urges Italy and France to budget discipline

2019-10-22T12:01:18.987Z

The EU Commission fears that the two states are over-indebted in the budget plans for 2020. The authority set a deadline for both governments.



The EU Commission has requested clarifications from Italy and France on the budget for 2020. In both cases, there is a risk that budgets would violate European guidelines for budget management and debt reduction, according to letters to governments in Rome and Paris. Both euro countries were given a deadline by Wednesday to provide the clarifications. Otherwise, the Commission threatens to reject the budgets.

In heavily indebted Italy, the authority criticizes the government for not doing enough to reduce debt. There is "the risk of significant deviation" from the EU requirements. The new government in Rome is trying to get the 2.2% budget deficit approved by the Commission.

Although this is below the stipulation of the Stability Pact of a maximum of three percent. However, the problem is the high level of total debt in Italy. This last stood at 134.8 percent of economic output.

Italian Prime Minister Giuseppe Conte immediately announced that he would deliver the requested clarifications. "We are not worried," he said. "This is a necessary dialogue with Brussels, which we will not escape."

Stability Pact violated

In France, the Commission has made no effort to reduce the structural deficit. This would not allow the country to comply with the debt reduction agreements in 2020.

The French government plans next year with a budget deficit of 2.2 percent. In the current year France had violated the requirements of the Stability Pact with 3.1 percent.

The government had to reduce its clean-up targets after President Emmanuel Macron had promised $ 9 billion in tax cuts in response to the Yellow-West protests. France's total debt is expected to fall only slightly from 98.8 percent in 2020 to 98.7 percent.

Letters from Brussels also existed for Belgium, Finland, Portugal and Spain. Here, however, the Commission did not set any time limits due to minor deviations.

Source: zeit

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