Between the wall of European rules and the sword of sanctions on excessive deficits and rising interest rates of debt, the Eurosceptic government of Italy decided to remain immovable.
In response to an unpublished call for a rewording of the budget proposal submitted by the European Commission, whose target date for reaching Brussels ended on Tuesday, November 13, Rome kept the outlines of the expansionary budget. A proposal that stifles the structural balance (measures fiscal consolidation) and raises doubts before the Commission and the International Monetary Fund about the estimated economic growth and the ability to continue reducing public debt. The fall forecasts published last week by the executive body of the Commission deepened the already existing differences in estimates of developments in the third largest economy in the euro area.
The administration, headed by Giuseppe Conte (pictured with Deputy Prime Minister Matteo Saloni and Luigi Di Maio) still maintains a target of 2.4% of the deficit in 2019, well above the 0.8% stability agreed between Brussels and the former Italian government Of the Democratic Party.
"There is no legislative news, we are obliged to contain the deficit" by 2.4 percent, said Di Mayo, a quote from Loussa, after the meeting of the Council of Ministers where the response was agreed to be given to the European Commission, to be sent by the Minister of Economy.
The coalition director of the five-star movement and the far right re-confirmed the numbers tonight, a few hours before the end of the Brussels deadline, which was midnight (another hour in Lisbon), to present Italy forecasts.
The day began with the news of the possibility of Italian Finance Minister Giovanni Treya agreeing to reduce the forecasts for economic growth and thus approach the European Commission's claims. However, freshly arrived terreiro clarify that "the rate of growth is not negotiable."
In recent days, prime ministers and leaders of the majority party, Matteo Saloni (Liga) and Luigi Di Maio (5), have issued similar statements rejecting any change in anti-regime responses.
And now, sanctions?
After the Italian budget proposal was sent to Brussels, the committee requested clarification from Rome. Given the run-off, Brussels has taken an unexpected device that European rules predicted since 2013 for the first time in the history of single currency and ask Italy to send a new budget proposal.
Now that the proposal has been kept, the commission may open an excessive deficit procedure against Italy, as already pointed out by Pierre Moscovici and Vladis Dombrovskis, respectively European Commissioner for Economic Affairs and Vice-President Committee with the protection of the euro.
According to this procedure, Rome may then face sanctions for disobedience to European rules, especially because of excessive deficits. The European Council may, for example, ask the European Investment Bank (EIB) to stop financing to Italy or to require Rome to make a financial deposit to be used as collateral by Brussels (this deposit does not entitle interest). In the end, Brussels may even impose fines on the government responsible for disobedience. These mechanisms are designed to prevent the fiscal policy adopted at the national level from harming economic and monetary union as a whole.
In 2016, the Commission proposed to impose sanctions on Portugal and Spain on non-reduction of their budget deficits. However, at the same time the European Council prevented the implementation of these sanctions, giving a last chance to Lisbon and Madrid to make further effort. However, this time Italy, now dominated by two critical parties of European integration and Eurozone rules, is politically isolated and even risks not seeing appeals to solidarity from other member states.
Bany and Treya recalled, last Friday, and next to Centeno, that regarding violations of the border of 3% of GDP on the deficit, "Germany [incumpriu]For the first time in 2003, and France has already done so several times. "France has set a deficit target of 2.8 percent of GDP for 2019, which has not received a clarification request from the committee.