Italian Prime Minister Giuseppe Conte said, as he arrived at the European Council meeting on Tuesday 2 July, that Italy now plans to be in line with its budgetary obligations for 2019 in order to avoid an excessive deficit procedure being opened against it.
“Last night, in the Council of Ministers, we passed a bill [...]. We put an additional seven billion euros on the table [...]. These seven billion euros allow us to say that we are in line with the forecasts we had predicted”, he said.
These statements are not inconsequential, as the College of Commissioners is due to meet on Wednesday 3 July to decide on a possible recommendation that the Council of the European Union open an excessive deficit procedure against Rome.
This would follow the report on the debt under Article 126.3 of the Treaty on the Functioning of the EU put forward by the institution at the beginning of June (see EUROPE 12269/1) and approved by national experts meeting within the EU Council's Economic and Financial Committee (see EUROPE 12272/2). The report pointed out that the debt criterion was not respected by Rome and that the opening of an excessive deficit procedure on the debt criterion is warranted.
For Mr Conte, the Italian government's recalculations should thus be in line with the December agreement with the Commission, counting on a nominal deficit rate of 2.04% of GDP this year. It also seems that the figures for the structural deficit are better than those forecast by the Commission. The Commission's spring economic forecast projects, given no policy changes, a deterioration in the structural deficit of 0.2% of GDP and a nominal deficit of 2.5% of GDP this year (see EUROPE 12249/6).
The seven billion euros mentioned by Mr Conte would mainly concern additional tax revenues, in particular VAT. In addition, reforms related to citizenship income and pensions would cost less than originally envisaged. (Original version in French by Lucas Tripoteau)