The European Central Bank has criticised Italy’s new populist government’s plans for tax cuts and a basic monthly income and continuity for pension payments. It warned Italy that it should avoid spending – given its €2.3 trillion debt.

“A loosening of the fiscal stance in high-debt countries could impact the fiscal outlook and, by extension, market sentiment,” said the bank in its biannual financial stability review published on May 24.

Headed by the anti-establishment 5-Star Movement and far-right League, the Italian government does not agree even though the country’s debt is more than double the EU permitted limit of 60% annual economic output. It’s currently 132% – second only to crisis-ravaged Greece.

As reported by Deutsche Welle (DW), Germany’s international broadcaster, Eurozone finance ministers meeting in Brussels on May 24 expressed some guarded appreciation for comments from the designated Prime Minister Giuseppe Conte, a little known law professor chosen by the 5-Star Movement.

German Finance Minister Olaf Scholz said: “It is a very good sign that the future Italian prime minister has made a very pro-European statement that he wants to abide by the rules jointly agreed in Europe with his government”.

“I’m ready to defend the interests of Italians in Europe and internationally, maintaining dialogue with European institutions and representatives of other countries,” Conte had said on May 24.