Italian Deputy Prime Minister Luigi Di Maio has announced his country’s decision to ignore the European Commission and stick to its deficit targets.
“There will be such an earthquake in all countries against the austerity that the rules will change the day after the elections,” Di Maio, who’s also the head of the Five Star Movement, said in an interview with Corriere della Sera published on October 7. He was referring to the need for the EU countries to reduce deficits under existing regulations.
As reported by Bloomberg, the European Commission last week rejected Italy’s plans for a wider budget deficit next year, raising the risk of an escalation in the conflict with Rome that has already taken a toll on the country’s bond and equity markets.
“Italy’s revised budgetary targets appear prima facie to point to a significant deviation from the fiscal path” commonly agreed by EU governments, Commissioners Valdis Dombrovskis and Pierre Moscovici wrote on October 5 in a letter to Italian Finance Minister Giovanni Tria.
Commission President Jean-Claude Juncker called on Italy to redouble its fiscal efforts to avoid deviating from budget-correction commitments.
Meanwhile, Italian lawmakers will start debating the government’s draft budget on October 9. The government is expected to submit a draft budgetary plan to the Commission by October 15. Then, the parliament has until the end of the year to approve the budget.