Brussels (AFP)

Brussels, which on Wednesday opened the way for possible financial sanctions against Italy because of its huge debt, may face the inflexibility of the populist government, including Matteo Salvini, with his victory in the European.

In a letter sent Wednesday, the European Commission is asking Italy for clarification on the deterioration of its public finances, saying that the country "has not made enough progress".

The populist coalition in power in Italy, which brings together the League (far right) and the Five Star Movement (M5S, antisystem), has until May 31 to respond to this letter.

But whatever its response, it is likely, given the state of the Italian finances, that Brussels recommends on June 5 the opening of a "procedure for excessive deficit" against her, as she had already done 2018.

The opening of such a procedure may eventually lead to penalties of up to 0.2% of GDP. But it will have to be validated, if necessary, by EU finance ministers, probably in July.

The threats from Brussels, however, may have only a limited effect on the Italian government, given the tone used in recent days by his strongman, Matteo Salvini, just haloed by the overwhelming victory of his party extreme right, the League, in the European elections.

The Italian Deputy Prime Minister had ironed Tuesday on "the small letter of Brussels", even referring to a fine of 3 billion euros - which roughly corresponds to 0.2% of Italy's GDP.

"All my energy will be used to change these old rules," Salvini promised.

- "You're mean!" -

"Gentlemen of Brussels, the time is over for the little letters, reminders, the + you are mean and you go to the table + and you remain precarious or unemployed for ten years because it is the European rule. growth and in the future, "he said.

He insisted on the need for a "fiscal shock" to revive the country, with an extension of the "flat tax" on the income of businesses and families. A measure that would cost, according to him, 30 billion euros.

The other deputy prime minister of the coalition, Luigi Di Maio, leader of the M5S, who suffered a disappointment in the elections, ruled Monday necessary to "implement serious tax cuts", a topic on which, however, was little worn until then.

The Italian government had already had trouble with the end of 2018 with Brussels, which had recommended for the first time the opening of an excessive deficit procedure.

Both parties had finally relaxed their positions to reach a timely compromise just months before the European elections.

But according to the Commission's latest forecasts, Italian debt is likely to reach new records: 132.2% of GDP in 2018, then 133.7% in 2019 and 135.7% in 2020, well above the threshold 60% fixed by the European rules.

And its structural deficit is expected to worsen as a significant improvement is demanded. It is difficult, in this context, to stop there with Italy.

The Milan Stock Exchange, maltreated like the other financial centers by the trade tensions between China and the United States, yielded 1.29% Wednesday at the close.

As for the spread, the closely watched discrepancy between the Italian and German borrowing rates, a good indicator of investors' anxiety, it has clearly tightened over the past three days, from 267 points on Friday to close at 282 points. Wednesday night, after a peak at 292 points.

? 2019 AFP