EU Scolds Italy ☝
EU Scolds Italy
It’s out of the frying pan and into the fire for Italy as the EU looks to crack down on its rising debt and structural deficit which are both beyond the EU’s accepted levels. Tsk tsk, Italy.
And this is not Italy’s first run in with the EU Commission. The country narrowly escaped EU punishment in December after a sizable clash with authorities over Rome’s 2019 budget, but now Italy is back on the Commission’s radar, and it’s not feeling particularly lenient.
For the past three years Italy has been supposed to reduce its debt and structural deficit to fall in line with the EU’s debt ceiling of 60% of GDP, but has been achieving the opposite. Italy’s debt levels have been rising by 0.6%-1.5% every year and are forecast to reach 133.7% of GDP this year and 135.2% in 2020. Ouch!
The EU has said it will not take this flagrant breach of regulations lying down, publicly announcing that they are likely to initiate disciplinary measures on June 5th. This gives Italian officials just over a week to come up with a compromise. Tick tock.
More excessive borrowing by Italy could threaten the entire Eurozone’s stability if left unchecked. Analysts are expecting the Commission will hold firm on its position to rein in Italy’s debt problem as giving in to its demands of looser fiscal regulation is far too risky at this point in time.
Better get ready to cough up, Italy, the EU means business!