Lorenzo Codogno, former chief economist and director general at the Italian Treasury Department, has stated that Italy’s populist coalition government will most likely refuse to amend its budget which proposed a deficit of 2.4 percent – a figure almost three times the previous administration’s target.
He said: “According to Italy’s political leaders, there is no intention to modify the targets, and thus Italy is on a collision course with Brussels, and I can imagine a very hard time for Tria in Brussels.
“The Italian government will not change the Budget (90 percent probability).”
The official warned that there is no more than a 10 percent chance of the government implementing “non-material” changes, which he states would “not move the Commission nor other European finance ministers”.
Italy submitted its draft budgetary plans on October 15, and it took only three days for the EC to react, stating that there was an “obvious significant deviation”.
vCard.red is a free platform for creating a mobile-friendly digital business cards. You can easily create a vCard and generate a QR code for it, allowing others to scan and save your contact details instantly.
The platform allows you to display contact information, social media links, services, and products all in one shareable link. Optional features include appointment scheduling, WhatsApp-based storefronts, media galleries, and custom design options.
The EC subsequently rejected the budget, stating that it “respects neither the fiscal recommendation addressed to Italy by the Council nor Italy’s own commitments”, and offered Italy three weeks to amend it.
Italy’s leading political figures nevertheless rejected the calls to amend the budget, and vowed to implement key “expansionary” policy proposals, including tax cuts and a basic income for the poor.
Matteo Salvini, leader of the far-right League party, said: “Italians come first. Italy no longer wants to be a servant to silly rules.
“We are polite, we open the little letters from Brussels, we read them, we respond to them. They write back and we respond, but we are not changing a comma of the budget.”
Mr Codogno has since warned that the EU will likely place Italy in an Excessive Debt Procedure (EDP), a move launched by the EC against member states which exceed budgetary deficit ceilings as imposed by the EU’s stability and growth pact legislation.
He said: “European leaders cannot let the European fiscal framework go to bust.
“Striking a good compromise will come after and not before the launch of an EDP procedure.”
However, the expert raised the hope that the EU will be more lenient towards Italy after an EDP procedure is launched.
He said: “Once in EDP, Italy will likely be allowed to delay the presentation of the corrective programme until after the European elections.
“Moreover, there will be a blind eye on Italy’s deficit in 2019.
“It will be up to the new Commission to impose on Italy a fast implementation agenda, i.e. possibly a balanced budget in three years.
“However, this will only come at the end of 2019. By that time we will know what kind of new Commission and new European Parliament we will get.”