Italy’s Di Maio, Salvini slam EU debt warning

Italian Deputy Premier and Interior Minister Matteo Salvini (R) attends an election campaign rally for the Lega candidate in Ascoli Piceno, Italy, 5 June 2019. [Sandro Perozzi/EPA/EFE]

Italy’s populist Deputy Prime Minister Luigi Di Maio on Wednesday (5 June) dismissed Brussels’ formal warning over the country’s excessive public spending as “too easy”.

“For years we’ve been giving without receiving, or we receive less than what we were due, we’ve been completely ignored for years on the matter of migrants, for instance,” said Di Maio, from the anti-establishment Five Star Movement (M5S).

“We bear all the weight, and as if that were not enough, they’re lecturing us. This won’t work, it’s too easy,” Di Maio wrote on Facebook.

“We will go to Europe and discuss responsibly, so we can construct and not destroy. But it’s tough, when you see that every day they find another reason to say bad things about Italy and this government,” Di Maio said.

The European Commission on Wednesday formally put Italy on notice over its deteriorating budget deficit and a huge debt mountain equal to more than 130% of total economic output, way above the EU’s 60% limit.

Commission to launch sanction procedure against Italy

The European Commission is preparing to launch a new excessive deficit procedure against Italy as a response to the government’s lack of efforts to control public spending in the highly indebted EU country.

The move by the EU’s executive arm begins a complicated process that, if approved by eurozone ministers, could result in an unprecedented fine of more than three billion euros.

Italian Prime Minister Giuseppe Conte, named to the job by Di Maio and far-right leader Matteo Salvini, said he wanted to “continue constructive dialogue” with Brussels.

Conte said in a statement that he “took note” of the Commission’s decision but recalled that Italy planned on reducing deficit to 1.5% of Gross Domestic Product by 2022.

Fellow Deputy Prime Minister Salvini, from the Lega party, criticised austerity policies which he said “increased debt and poverty”.

“The only way to reduce debt from the past is to lower taxes and allow Italians to work more and better,” the anti-migrant Salvini said in a statement.

Salvini has said he wants to apply a so-called “flat tax” of 15 percent on annual income of 50-60,000 euros but the details have not been finalised.

“Cuts, fines and austerity have increased debt, poverty, financial insecurity and unemployment; we have to do the opposite,” said Salvini, whose party won 34 percent of votes in last month’s European parliament elections.

“We’re not asking for money from anyone else, we just want to invest in jobs, growth, research and infrastructure. I’m convinced that Brussels will respect this desire,” he said.

Di Maio insisted that the public debt had been accumulated by the previous centre-left government of the Democratic Party (PD).

“Now they’re talking a lot about this possible infraction procedure and you know what that’s about. That’s about the debt accumulated by the PD in 2017 and 2018,” Di Maio wrote.

The Commission has however only cited the deficit increase under M5S and Salvini’s Lega since they formed a coalition government a year ago.

“It’s inconceivable for a country with six million unemployed and thousands of businesses producing less than their potential to be crucified because it wants to invest in growth, employment and lowering taxes,” Di Maio said.

Five takeaways from the EU’s economic recommendations to member states

While the public finances of all EU member states are now officially out of the “red zone”, the European Commission on Wednesday (5 June) still had tough economic policy recommendations for Spain, Italy, Belgium, Greece and Germany.

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