January 21, 2020
Finance

Pierre Moscovici: Brussels better off not fighting Italy over budget

Its not in Brussels interest to pick a fight with Italy over its “explosive” debt and its budget targets but that doesnt mean Rome shouldnt respect EU fiscal rules, European Commissioner for Economic and Financial Affairs Pierre Moscovici said Friday.

“We have no interest in a crisis between the Commission and Italy, nobody has an interest because Italy is an important eurozone country,” the commissioner told Frances BFM TV.

“But we dont have any interest either that Italy does not respect the rules and does not reduce its debt, which remains explosive,” he said.

“When youre in debt, youre cornered and you cant act,” the French commissioner added. “Staging a recovery with very high debt eventually turns against you.”

Italys debt has been under pressure Friday, with the yield on its 10-year bonds rising above 3 percent. That came after the countrys anti-establishment 5Star Movement and the far-right League on Thursday forced Giovanni Tria, a technocrat, to agree on a 2019 deficit at 2.4 percent of GDP, far higher than the 1.6 percent that the economy minister had wanted.

Financial markets have been nervous since the government took office in June over fears that its spending plans will increase Italys debt, which stands at around 131 percent of national output and is the highest in the eurozone after Greece.

Italys 2019 budget law must be presented to Brussels by October 15 and to the parliament in Rome by October 20 before being approved by year-end.

The European Commission said Friday it will assess Italys draft budget plans — and those for all eurozone members — before the end of November, Reuters reported.

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