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Maneuver, EU: Italy risks being non-compliant with the Stability and Growth Pact

2019-11-20T11:35:07.923Z

The vice-president of the European Commission, Valdis Dombrovskis, asked Italy to adopt "the necessary measures" to bring the Stability and Growth Pact into conformity with the approval of the budget law in Parliament



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20 November 2019 The budget for 2020 presented by the Italian government to the EU risks being "non-compliant" with the requirements of the Stability and Growth Pact. This is the judgment of the European Commission on the draft budget that the Treasury has sent to Brussels.

According to the opinion of the European Commission on the draft budgets of the euro area countries, "these risks refer both to the insufficient reduction of the high level of public debt, and to the expected significant deviation from the adjustment path towards the respective budgetary objective to middle term".

The judgment of the EU executive, in addition to Italy, concerns seven other Member States of the euro area: Belgium, Spain, France, Portugal, Slovenia, Slovakia and Finland.

For all these countries, "the budgetary planning documents carry the risk of non-compliance with the 2020 requirements set out in the Stability and Growth Pact". In the case of Belgium, Spain, France and Italy, these risks refer precisely to the "insufficient reduction of the high level of public debt" and "to the significant deviation from the adjustment path towards the respective medium-term budgetary objective".

However, the Commission points out that "no budgetary plan for 2020 shows particularly serious compliance with the requirements of the stability pact".

The vice-president of the European Commission, Valdis Dombrovskis, asked Italy to adopt "the necessary measures" to bring the Stability and Growth Pact into conformity with the approval of the budget law in Parliament.

"Belgium, Spain, France, Italy, Portugal, Slovenia, Slovakia and Finland are at risk of non-compliance with the Stability and Growth Pact", Dombrovskis recalled during a press conference: "we invite all Member States that are at risk of non-compliance of the Pact to take the necessary measures within the national budget (approval) process to ensure that the 2020 budget complies with the Stability and Growth Pact ".Dombrovskis stressed that among the cases of risk of" not compliance "with the rules, those who" worry most are those with debt levels that are high and not reduced to sufficient speed. Belgium, Spain and France have very high debt ratios, almost 100%. Italy exceeds 136% ". Without corrections - added Dombrovskis - in 2020 these countries will not respect "the debt rule".

The Vice-President of the Commission accused Italy, Belgium, Spain and France of "not having sufficiently used the favorable economic period to put public finances in order". The fact that by 2020 there are no significant fiscal adjustments or, in the case of Italy, fiscal expansion is expected "is worrying because very high debt levels limit the ability to respond to economic shocks and market pressures "said Dombrovskis.

Source: rainews

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