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Italy must stick to its budget promise, EU's official says

Xinhua,April 08, 2018 Adjust font size:

ROME, April 7 (Xinhua) -- Italy must stick to its deficit-reduction commitments and there is no more room for flexibility, European Commission Vice President Valdis Dombrovskis said in a televised interview on the shores of Italy's Lake Como on Saturday.

"For the Commission it is essential that Italy stick to its budget, deficit-reduction, and debt targets," Dombrovskis spoke on the sidelines of the Ambrosetti Forum, an annual meeting of world industrial elites, heads of state and institutional representatives organized by the Ambrosetti think tank.

"We expect Italy to make a structural budget adjustment equal to 0.3 percent of GDP," Dombrosvkis added.

In response, sources from the Economy Ministry told ANSA Inews agency that the 0.3 percent adjustment "was announced by (outgoing) Economy Minister Pier Carlo Padoan in a May 2017 letter to the European Commission, and the government has programmed it into its 2018 budget".

Dombrovskis' comments came in the wake of a March general election that delivered a hung parliament and two relative, euroskeptic winners: the populist Five Star Movement, and a center-right bloc led by the rightwing League, whose chief, Matteo Salvini, may well become the next prime minister of Italy

Both the Five Stars and the League have pledged to break European Union rules on public spending if necessary.

Indeed, in a tweet not long after Dombrovskis' comments, Salvini said that if the EU "requests more sacrifices... and cuts, the Salvini government will say NO THANK YOU."

Also on Saturday, a new report by the CGIA think tank said that Italy's incoming government "will have to implement new budget measures worth at least 18.5 billion euros (22.75 billion U.S. dollars) by the end of this year if it wants to avoid having to take unpopular measures, such as a VAT tax hike".

Such measures would be in direct contrast to electoral promises made by the winning parties, including a 20 percent flat tax and the introduction of universal basic income, according to the CGIA report. Enditem

 

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