Italy’s Bag­nai says no rea­son to change 2019 bud­get

Global Times US Edition - - WORLD -

There is no rea­son to change the struc­ture of Italy’s 2019 bud­get law, the head of the Ital­ian se­nate’s fi­nance com­mit­tee said on Tues­day.

Ital­ian bonds ral­lied on Mon­day af­ter re­ports that Italy’s rul­ing coali­tion was bow­ing to pres­sure from the Euro­pean Union and may re­duce next year’s bud­get deficit tar­get.

“Our coun­try, re­gard­less of what it wants to do, is headed by a gov­ern­ment that has po­lit­i­cal views which are dif­fer­ent from those of the (Euro­pean) Com­mis­sion and the Com­mis­sion is try­ing to fight it,” economist Aberto Bag­nai told state ra­dio.

“This at­ti­tude is de­rail­ing the whole Euro­pean project. There are nei­ther po­lit­i­cal nor eco­nomic rea­sons to mod­ify the struc­ture of the bud­get,” said Bag­nai, who de­scribed the euro cur­rency as an “eco­nomic mon­ster” in a book he wrote in 2012.

The spend­ing plans of Italy’s new pop­ulist gov­ern­ment have prompted for­eign investors to cut their hold­ings of Ital­ian state bonds by 69 bil­lion euros ($78 bil­lion) since May.

Bag­nai said he did not see any in­vestor flight from Ital­ian bonds.

“I see sev­eral at­tempts by Euro­pean in­sti­tu­tions, which should be do­ing the ex­act op­po­site, seek­ing to spread panic over the state of the Ital­ian econ­omy – with­out suc­ceed­ing be­cause the Ital­ian econ­omy is solid.”

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