The Italian government will start to increase spending on emergency funds this week to deal with the earthquakes that have struck the country, independent of a European Commission request to reduce its structural deficit. EURACTIV’s partner Milano Finanza reports.
Brussels has asked Rome to correct its structural deficit for 2017, which currently stands at about 2.3% of GDP, by 0.2%. That figure translates to about €3.4 billion.
At the end of an ECOFIN summit Friday (27 January), Minister of Economy and Finances Pier Carlo Padoan said that “the Commission awaits a response by 1 February and that response will arrive”.
Italy, for its part, has asked Brussels to increase the 2017 deficit by 0.4%, in order for it to pay for emergency measures and reconstruction projects that will clean up after the recent spate of lethal earthquakes, as well as costs incurred by the ongoing refugee crisis.
Padoan also insisted that the expenses Rome will have to make will “surely be taken into account and there will be an increase in spending”. The minister also said that he expects “tangible measures” to be implemented by the government from the beginning of this week.
He added that this will be a carried out “independently of how we respond to the Commission’s request”.
In a letter to Commission President Jean-Claude Juncker, Italy’s new Prime Minister, Paolo Gentiloni, reminded him of the dreadful tragedy that has hit central Italy over the last three months, insisting “Italy will spend that which it needs to.” Padoan said that it was a point that needed to be reinforced.
Commission spokespeople confirmed that Juncker had received the letter and following the ECOFIN meeting, Vice-President Valdis Dombrovskis said that “there have been discussions with Italy for a few months, of course we realise there are certain obstacles to the speed of these decisions, but we expect firm commitments”.
The Latvian politician, who holds the executive’s Euro and Social Dialogue portfolio, reiterated that Italy’s debt is very high and “has not decreased in recent years”, adding that that is why the executive is checking whether Rome has complied with the rules.
Fellow Commissioner Pierre Moscovici said on Thursday (26 January) that he was confident that an agreeable solution would be found with Italy.
Indeed, if the Commission were to decide that Italy is non-compliant and open an infringement procedure against Rome, the consequences could be serious.
“An infringement procedure would be a big problem for Italy in terms of our reputation, which we have built up and strengthened recently. It would be a U-turn,” warned Padoan.
The finance minister has tried to minimise anti-European sentiment in Italy, even within the ruling Democratic Party, where the Commission’s request, especially in light of the destruction wrought by the earthquakes, has not gone down well.
“Anti-European voices have always been there, they are nothing new,” Padoan explained. He also insisted that there was no big news about how the member states will deal with the United Kingdom when it comes to Brexit.
But he did reveal that “a lot” of time was dedicated at the ECOFIN meeting to the issue of the UK’s withdraw and what the new Trump administration will mean for Europe.
Padoan concluded that “this year will be politically difficult for many countries”.