EU WARNING: Juncker THREATENS Italy over budget row – ‘DON’T turn your back on Europe’

Speaking at a G20 summit press conference with Donald Tusk, the European Commission President claimed to have made progress with ‘s Prime Minister Giuseppe Conte over the disputed budget plans. But the EU leader warned the eurosceptic Government to be “with Europe” if they want Europe to be on their side. Mr Juncker claimed tensions between the Commission and Italy should not be “dramatised” and called on Italy to return to being “the Italy it always was”.

He said: “I have a meeting with Giuseppe Conte in the next few days or tomorrow – I don’t know when exactly it will happen.

“I had a meeting with the Italian Prime Minister last Saturday in Brussels.

“We made some progress. We are not at war with Italy.

“I want Italy to be the Italy it always was, inspiring Europe not turning its back to Europe.

“The atmosphere is good, we are making progress and we should not dramatise this issue. We are with Italy if Italy is with us.”

Last week the EU announced its intention to look into sanctioning Italy over its defiance on the budget.

In a statement, the European Commission said: “With regret, that today we confirm our assessment that Italy’s draft budget plan is in particularly serious non-compliance with the Council recommendation of 13 July.”

The row started during the summer when the populist government coalition formed by right-wing Lega and the grassroots party Five Star Movement voiced their intention to increase the country’s deficit.

This move has been described by both Mr Salvini and his governing partner Luigi Di Maio as “non-negotiable”.

However, they both conceded next year’s budget could be slightly lowered – an option Mr Codogno believes could be carried out last minute.

He said: “I doubt that Italy will drastically change its budget.

“Moreover, time is running out fast. Parliament is supposed to approve the budget by year-end, and a good part of the work has already been done.

“Still, there are significant openings, and there is still some time to at least partly change direction. If that happens, it may indeed prove market friendly.”

Among the measures promised but the Lega-Five Star Movement government, there was a revision of the pensionable age, the introduction of the flat tax – which applies the same tax rate to every taxpayer regardless of the income – and the basic income.

According to the government, these hefty measures will be paid by raising the budget deficit to 2.4 percent of the GDP in 2019.

The previous centre-left wing Italian government had submitted a 2019 budget with a draft budget deficit of just 0.8 percent.

Italy’s GDP in 2017 amounted to £1.510trillion.

Italy’s debt, at 131 percent of GDP (£2.03trillion), is proportionally the second highest in the eurozone after the one of Greece.