{"id":18597,"date":"2018-11-06T01:48:51","date_gmt":"2018-11-05T23:48:51","guid":{"rendered":"https:\/\/bestinsurance.gr\/a1\/?p=18597"},"modified":"2018-11-06T01:48:51","modified_gmt":"2018-11-05T23:48:51","slug":"euro-area-finance-chiefs-keep-pressure-on-italy-to-alter-budget","status":"publish","type":"post","link":"https:\/\/bestinsurance.gr\/a1\/archives\/18597","title":{"rendered":"Euro-Area Finance Chiefs Keep Pressure on Italy to Alter Budget"},"content":{"rendered":"
(Bloomberg) —<\/span><\/section>\n
Italy signaled it\u2019s not ready to budge on its controversial budget even as euro-area finance ministers called on it to prepare revised spending plans that comply with the bloc\u2019s rules, in a sign that the standoff between Brussels and Rome is set to escalate in the coming weeks.<\/p>\n

The finance chiefs\u2019 call comes amid a dispute over budget plans that the EU says go against Italy\u2019s commitments to reduce its debt load. In an unprecedented rebuke, the European Commission<\/a>asked Italy last month to submit revised spending plans by Nov. 13, after it essentially rejected the country\u2019s budget for 2019, saying that it constitutes a clear deviation from commonly agreed rules.<\/p>\n

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Giovanni Tria<\/p>\n<\/div>\n<\/figcaption><\/figure>\n

But despite repeated warnings, Italian Finance Minister Giovanni Tria<\/a> told reporters after the meeting in Brussels on Monday with his euro-area counterparts that the government would not change the budget law. The defiance means that even though Italy is willing to engage in talks with the commission over its spending plans, it\u2019s unlikely to make sufficient concessions to appease Brussels.<\/p>\n

\u201cWe expect a new and revised draft budgetary plan by Nov. 13 and that is a necessity,\u201d EU economic affairs chief Pierre Moscovici<\/a> told reporters after the meeting. \u201cAnd the questions we have raised are still on the table.\u201d<\/p>\n

Better Explanations<\/h3>\n

The commission\u2019s call for a revised budget came after months of discord over the spending targets, which sent Italian bond yields to a four-year high last month.<\/p>\n

But Tria also expressed optimism that Italian securities would recover. \u201cWe hope that the spread will go down when our strategy is better understood,\u201d he said. \u201cAnd maybe after the dialogue with the commission.\u201d<\/p>\n

During Monday\u2019s meeting, the Italian finance chief told his colleagues that the country\u2019s planned deviation was not huge and that EU rules allow for some flexibility, while he reiterated his government\u2019s commitment to reduce the country\u2019s debt load, an official familiar with the discussion said.<\/p>\n

But Italy\u2019s willingness to further explain the numbers and policies in the spending plans is unlikely to be enough to address the commission\u2019s concerns.<\/p>\n

In a joint statement, the bloc\u2019s ministers said they agreed with the assessment by the commission and called on Italy to engage in \u201copen and constructive dialogue\u201d and to cooperate closely with the commission \u201cin the preparation of a revised budgetary plan which is in line with the stability and growth pact.\u201d<\/p>\n

The statement also stressed the importance of sufficient debt reduction, a clear message to Italy, which has the highest debt ratio in the euro area after Greece.<\/p>\n

\u2018Plan B\u2019<\/h3>\n

Despite repeated warnings, Prime Minister Giuseppe Conte<\/a> has said there\u2019s no \u201cPlan B\u201d for the fiscal program, indicating the government has little intention to comply with EU demands.<\/p>\n

Once Italy responds to the commission, the EU\u2019s executive arm will have three weeks to publish its final assessment on whether the country\u2019s spending plans are in breach of EU rules. One possible outcome, EU officials say, would be for the commission to bring up to Nov. 21 the publication of a report on Italy\u2019s compliance with EU rules on debt that was originally planned for the spring.<\/p>\n

EU Rules<\/h3>\n

If the report shows that Italy is failing to comply with rules on reducing its debt — which is more than twice the EU limit — then that could trigger the so-called excessive deficit procedure, a process that could eventually lead to financial sanctions for the government in Rome. The penalty could reach 0.2 percent of the country\u2019s annual economic output, which was 1.7 trillion euros<\/a> ($1.9 trillion) in 2017.<\/p>\n

Euro-Area Finance Chiefs Talk Italy Amid Sanctions Threat<\/a><\/p>\n

Financial penalties proposed by the commission have to be approved by member states, which can block the process. But while Brussels has limited powers over national budgets, governments have in the past sought to avoid an official reprimand because of the stigma and the potential market implications.<\/p>\n

Under EU rules, no country should have a budget deficit larger than 3 percent of gross domestic product or debt above 60 percent of output and those that are outside of those limits must set annual targets to show they\u2019re moving in the right direction. While Italy\u2019s deficit is well within the 3 percent limit, the commission has demanded smaller gaps for the country to bring down its debt load.<\/p>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

(Bloomberg) — Italy signaled it\u2019s not ready to budge on its controversial budget even as euro-area finance ministers called on it to prepare revised spending plans that comply with the bloc\u2019s rules, in a sign that the standoff between Brussels and Rome is set to escalate in the coming weeks. The finance chiefs\u2019 call comes<\/p>\n","protected":false},"author":1,"featured_media":18574,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-18597","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-1"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/18597","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/comments?post=18597"}],"version-history":[{"count":1,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/18597\/revisions"}],"predecessor-version":[{"id":18599,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/18597\/revisions\/18599"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/media\/18574"}],"wp:attachment":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/media?parent=18597"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/categories?post=18597"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/tags?post=18597"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}