Italy has vowed to respect the European Union's fiscal rules in its next bu...
ROME - Italy has vowed to respect the European Union’s fiscal rules in its next budget despite deteriorating public finances and a pledge by the anti-austerity government for swingeing tax cuts.
“I wish to reiterate that the 2020 budget will be SGP compliant,” Tria said in his letter to Brussels, published late on Friday. Under EU rules, it is required to shrink the deficit by 0.6% of gross domestic product every year until it is in balance. Instead it has been rising every year since 2015.The EU’s letter, signed by economic commissioners Valdis Dombrovskis and Pierre Moscovici, was sent on Wednesday, a day after Italy’s right-wing Deputy Prime Minister Matteo Salvini called EU fiscal rules obsolete.
Five-star, licking its wounds after its EU election defeat, has said it backs Salvini’s tax plans but will not accept any cuts to health or welfare spending. Under EU law, the Commission is obliged to warn member states in writing when they fail to abide by agreed fiscal targets. These require them to keep the headline deficit below 3% of GDP and debt below 60% of GDP.
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