EU rejects Italy’s proposed 2019 budget and demands new plan

Country now has three weeks to revise its budget under EU rules

The European Commission has rejected Italy’s proposed 2019 budget and asked for a new plan, a first in European Union history, a European source said yesterday.

The Commission, the executive arm of the 28-nation EU, reviews the budgets of the 19 Eurozone economies to check for compliance with its deficit and other standards.

European Economics Commissioner Pierre Moscovici was to ask Italy’s populist government yesterday to “revise its budget,” which exceeds EU limits, the source said on condition of anonymity.

The source said the decision was taken by the 28 commissioners during a meeting in Strasbourg, France. Italy now has three weeks to revise its budget, under EU rules.

Italy’s government says it will stick to a deficit of 2.4 per cent of annual economic output next year, which would be triple the amount forecast by the previous government and approach the EU limit of 3.0 per cent.

In turn, it would aggravate Italy’s already huge debt mountain, at some 130 per cent of gross domestic product (GDP), way above the EU’s 60-percent ceiling and second only to Greece’s in Europe.

Budget to ‘spur growth’

But the coalition government of the anti-establishment Five Star Movement (M5S) and antiimmigrant League has said it would reduce total debt to 126.5 per cent in 2021.

Italian Prime Minister Giuseppe Conte told journalists on Monday that the budget is designed to spur growth and avoid a recession.

“We want a dialogue with European institutions in a spirit of faithful collaboration and constructive dialogue,” he said.

In its four-page letter to the European Commission, Italy’s government admitted its budget was “not in line with the norms of the stability and growth pact” governing EU member state public finances.

“It was a difficult decision but necessary given the delay in achieving pre-crisis GDP levels and the dramatic economic situation of the most disadvantaged in Italian society,” the letter said. ust over a year ago Apple Inc. Chief Executive Officer Tim Cook met with Emmanuel Macron in France’s presidential palace.

They discussed how Europe was going to get technology giants to pay more taxes.

Cook was back in Paris to see Macron yesterday. But the French president has little to show for his efforts to get Europe to agree on a digital tax.

Macron’s original plan for a general tax on internet giants like Apple got little traction. Now he’s talking about a European Commission idea for a temporary tax on digital revenues. France wants an agreement by the end of the year, but even that requires the unanimous backing of members. And Europe isn’t unanimous.

budget deficit Italy says it will stick to next year, triple the previous amount

We want a dialogue with European institutions in a spirit of faithful collaboration and constructive dialogue.” Giuseppe Conte | Italian prime minister