Not only has Italy refused to buckle under European Union pressure to water down its ambitious 2019 budget plans, the government has also threatened to sue EU officials blamed for a deepening sell-off on Rome’s financial markets.
“We are not turning back from the 2.4% target… We will not backtrack by a millimetre,” Luigi Di Maio, deputy prime minister and leader of the anti-establishment 5-Star Movement, said on RTL radio.
As reported by the Reuters news agency, the tripling of its predecessor’s goal by the EU’s second most indebted nation unnerved investors and prompted criticism and calls for a rethink from the European Commission.
As Italian bonds and banking shares sold off sharply, Di Maio said there was “no doubt” the leaders of France and Germany wanted the Italian government to fall, while one lawmaker suggested the country would be better off without the euro.
However, eurozone finance ministers meeting in Luxembourg on October 2 said Italy needed to toe the fiscal line.
“The majority of the member states will clearly ask and demand that these (EU budget) rules are observed,” Austrian minister Hartwig Loger, whose country holds the rotating EU presidency, told a news conference.
European Commission Vice President Valdis Dombrovskis said the current draft appeared not to comply with the rules, though Brussels was open to dialogue.
‘We are ready to seek damages’
Meanwhile, Italy’s Deputy Prime Minister, far-right League leader Matteo Salvini, warned it might seek compensation from the EU over Italy’s rising borrowing costs. “The words and the threats of Juncker and other high EU bureaucrats continue to raise the spread (between Italian and German bond yields). We are ready to seek damages from those who want to harm Italy.”
On October 1, EU Commission President Jean-Claude Juncker said the EU must be “strict” with Italy to avoid putting the euro project at risk.
As reported by the Agence France-Presse (AFP), Salvini accuses Juncker of unjustly comparing Italy to Greece by saying on Monday that “after the toughest management of the Greece crisis, we have to do everything to avoid a new Greece — this time an Italy – crisis”.
“I think there was some of which was lost in translation…,” said EU commission spokesman Margaritis Schinas, adding that Juncker had been speaking in German, which was simultaneously translated into English, and from that into Italian. “It was not said as reported in these dramatic tones,” he said.