A report by the Brussels-based executive stated that Italy’s growing debt has sparked the need for a so-called “excessive debt procedure”. EU finance ministers will now be asked support the Commission’s assessment in the next two weeks, allowing eurocrats to kickstart the procedure. Italy has made limited progress in addressing EU fiscal recommendations to address the country’s mounting debt crisis during a drawn-out row between Brussels and Rome.
The Commission said: “This may negatively affect Italy’s growth potential.”
Italy’s public debt from from 131.4 percent of GDP in 2017 to 132.2 percent in 2018.
The Commission has estimated that debt will continue to rise to 133.7 percent this year and 135.2 percent in 2020, a breach of EU rules that state the figure should be decreasing.
Pierre Moscovici, the Commission’s finance chief, said there is still scope for Italy to avoid being dragged into the disciplinary procedure by the bloc.
He added: “Our door is open, we are there to listen, we want an exchange. It is now up to Italy to demonstrate how we might avoid an excessive debt procedure being triggered.”
Valdis Dombrovskis, the Commission’s markets chief, said: “For Italy, there is a path to recovery and growth.
“Other countries have already taken it, with success.
“This path follows a renewed reform effort to address long-standing structural weaknesses in its economy.”