The European Commission is likely to begin disciplinary procedures against Italy...
BRUSSELS - The European Commission is likely to begin disciplinary procedures against Italy on Wednesday over the country’s failure to reduce public debt as required by EU law.
Italy’s debt has been rising: it went up to 132.2% of GDP in 2018 from 131.4% in 2017 and will rise to 133.7% this year and to 135.2% in 2020, according to Commission forecasts.EU rules also say that governments must cut the structural deficit, a measure excluding one-off revenue and spending and the effects of the business cycle, every year until it is near balance or surplus.
EU finance ministers have asked Italy to cut its structural deficit by 0.6% of GDP a year until it’s in balance or surplus. Instead, the gap has been rising every year since 2015 and is forecast to go up to 2.4% of GDP this year and 3.6% in 2020 unless policies change.
Euro zone officials are concerned that if the trend continues, Italy might eventually lose access to markets, which would mean another sovereign debt crisis — on a much bigger scale than the one Greece triggered in 2010.Disciplinary steps are a complex legal process that could end in a fine of 0.2 percent of Italian GDP, which would be equal to around 3.5 billion euros. No EU country has ever been fined.
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