The European Commission said it would give the green light to Italy’s budget plan for 2020, even though it risks “non-compliance with the Stability and Growth Pact in 2020”.
The commission warned that Italy’s budget risks breaching the bloc’s strict fiscal regulations next year.
France, Spain, Portugal, Slovakia, Slovenia, Finland and Belgium were also warned about their budgets, but the EU placed particular pressure on Rome to deliver reforms.
EU rules on public debt and deficits are the cornerstone of eurozone membership: countries using the single currency are required to limit deficit spending to three per cent of GDP and overall debt to 60 per cent.
Brussels is particularly concerned about Italy’s mountain of debt that is expected to balloon to a huge 136.8 per cent of GDP, the highest in the eurozone after bailed out Greece.
Italy has “not sufficiently used favourable economic times to put their public finances in order”, according to commission vice president Valdis Dombrovskis.
“In 2020, they plan either no meaningful fiscal adjustment or even a fiscal expansion,” he added.
Rome is in disagreement with the EU on the ambition of pledged reforms, and will have to negotiate with Brussels over the coming months in order to avoid potential penalties next year.
