Italy rejects EU calls to amend budget ahead of deadline
Italy defied a European Commission deadline to submit a revised budget tonight, telling the EU it will not change its expansive fiscal plans.
Ahead of a midnight deadline, the Italian government said it was sticking to its guns.
In a statement released after a cabinet meeting, deputy prime minister Matteo Salvini said its deficit target would remain at 2.4 per cent of gross domestic product (GDP), and its growth forecast at 1.5 per cent, though asset sales would be increased and spending monitored.
Italy’s populist coalition government had come under substantial pressure to revise its budget.
Both the International Monetary Fund (IMF) and EU Commission disagreed with Italy’s fiscal forecasts, with the IMF predicting Italy’s budget would push its deficit to 2.7 per cent of GDP in 2019 and the commission estimating its deficit would rise to 2.9 per cent of GDP in 2019.
The commission could now begin disciplinary measures, which could ultimately result in fines for the eurozone’s third-largest economy.
If Italy was fined, it would mark the first time the EU has fined a member state for breaching its budget rules.