EU to ask Italy to explain deterioration of public finances
  • WORLD

  • 15:37 29 May 2019

EU to ask Italy to explain deterioration of public finances

The European Commission will ask Italy on Wednesday to explain what factors contributed to the deterioration of its public finances as the EU executive prepares a report that is likely to be the basis of disciplinary action against Rome,ONA reports citing Reuters.

The Commission’s request, in the form of a letter to Italy’s finance minister Giovanni Tria, is a legal obligation under EU law when a country has a public debt above the EU ceiling of 60% of gross domestic product and is not reducing it as required.

Italy’s debt rose from 131.4% of GDP in 2017 to 132.2% in 2018 and will go up to 133.7% this year and to 135.2% in 2020, according to Commission forecasts.

To make matters worse, Italy’s structural deficit, which under EU law should shrink by 0.6% of GDP a year until it is in balance, has instead been rising every year since 2015.

The structural deficit, which excludes one-off revenue and spending and the effects of the business cycle, is set to reach 2.4% of GDP this year and 3.6% in 2020 unless policies change.

“The letter to Italy will be sent in the afternoon after the meeting of the college of commissioners,” one EU official said.

ONA

Tags: EU Italy world

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