In its quarterly forecast, the EU said growth in the eurozone would hit just 1.2 per cent this year, down from the already weak 1.3 per cent predicted in February.
The commission also warned that Italy’s public debt would balloon to a record 133.7 per cent of GDP in 2019.
It also predicted that Italian debt would grow even further in 2020 to 135.2 per cent of GDP, well over commitments made to Brussels.
Italy’s public debt is currently around €2.3 trillion, or 132 per cent of the nation’s GDP – well above the 60 per cent EU ceiling.
Austrian Chancellor Sebastian Kurz on Monday warned that, without tougher EU rules for excessive debt, Italy could jeopardise the entire eurozone.
Sanctions for EU members with high debt “will prevent Italy, for example, ending up a second Greece thanks to irresponsible debt policies”, Kurz told Italian daily La Stampa.
“This is the only way we can avoid Italy putting the entire eurozone at risk,” he added.
Italy’s ruling coalition of the anti-establishment Five Star Movement (M5S) and far-right League party has increased the country’s budget deficit since coming to power last June.
The populist government has implemented big-spending election promises, including tax cuts and generous income support, causing concerns among other EU countries.
