The European Commission reiterated on Wednesday 21 November that the revised draft Italian budget for 2019 was characterised by "a particularly serious non-compliance" of Italy's budgetary obligations under the Stability and Growth Pact.
It also concluded, in a debt report adopted on the basis of Article 126.3 TFEU, that Rome did not respect the public debt criterion with regard to the Treaties, thus paving the way for the opening of an excessive deficit procedure. This would be a first for a eurozone country.
"This step that we take today is the logical and unavoidable consequence of the decision taken the Italian authorities not to modify the fiscal target," said Pierre Moscovici, Commissioner for Economic and Financial Affairs, presenting to the press the Commission's opinions on the 2019 draft budgets of the euro area countries (see other news).
The Commissioner thus referred to the fact that Giuseppe Conte's government proposed, on 13 November, a revised draft budget similar to the first draft, which was first rejected by the Commission on 23 October (see EUROPE 12137, 12123).
This outcome was hardly in doubt, as Giovanni Tria's statements to the Eurogroup on 19 November suggested a willingness on the part of Rome to comply with its own budgetary projections (see EUROPE 12140).
"Euro are countries are in the same team, they should be playing by the same rules." said Valdis Dombrovskis, the European Commission Vice-President responsible for the euro, to justify the complaints sent to the Italian authorities.
The Commission's report on the Italian debt points out that public debt is expected to reach 130.9% of national GDP in 2018 and 129.2% in 2019. This reduction is not in line with the Rome commitments.
On the procedural side, the Member States, meeting in the Economic and Financial Committee of the Council of the Union, must decide within 15 days on the report '126.3 TFEU'.
According to Mr Moscovici, there is "no reason for them to disagree" with the Commission's analysis. The Commission could then recommend to the EU Council to open an excessive deficit procedure based on debt criteria. The decision would then be adopted automatically unless a majority of States (excluding Italy) explicitly oppose it.
Reactions. Rome's reaction was not long in coming. On Twitter, Matteo Salvini, Deputy Prime Minister of the Government, asked the Italian people for "respect for Europe". "Let's move on!", he added with reference to the measures envisaged in the draft budget.
Italian Finance Minister Tria wanted to "continue dialogue with the Commission to seek a shared solution in our mutual interests", according to Reuters. However, he does not seem to be considering today returning to the budgetary path set by his government.
Mário Centeno, the president of the Eurogroup, was finally cautious. "We will discuss this in the Eurogroup in December. I cannot and will not pre-empt that discussion now." he said. (Original version in French by Lucas Tripoteau)