Fear of EU sanctions as Italy tweaks budget but keeps 2.4% deficit
194 views · Published 19 November 2018 · 3:07 · Indexed 7 October 2026
Channel: AP Archive · 2018 · News & Politics
(14 Nov 2018) After Italy's populist government confirmed on Tuesday it will maintain its controversial 2.4 percent budget deficit in response to EU demands for changes, analysts expect tough reactions on the side of the EU and possibly sanctions. "I think we are approaching sanctions from the European Union because I think that the Italian government unfortunately has chosen a conflicting course with the European Union", said Corriere della Sera political columnist Massimo Franco. Franco said the current Italian budget crisis would have a negative effect on Italians' savings, and is mostly due to an internal political battle between the two majority parties, The League and the 5 Star-Movement, which are conducting a political campaign in view of the EU parliament elections scheduled for May. "I think that the big problem is that this majority has chosen to discharge its internal problems on Europe and to use them in the next electoral campaign", said Franco. Financial markets in Italy dropped to minus 1.15% at the opening on Wednesday showing a negative reaction to the cabinet announcement of the night before. Same for the Italian-German benchmark BTP-BUND which increased to reached a value of 315 percent. The Italian cabinet announced that a letter to Brussels is being prepared by Economics Minister Giovanni Tria, and it would allegedly outline plans to raise cash through the sale of secondary real estate, which Di Maio said would have an impact on Italy's stubbornly high public debt. Di Maio didn't specify what would be sold, but said it would not include "the family jewels". European officials have staunchly opposed the 2.4 percent deficit, which is more than three times the target of the previous government, and at a level that would keep Italy from reducing its debt load as it had promised. Italy's debt is currently around 130 percent of GDP, far above the EU limit of 60 percent and the second highest in Europe after Greece. Find out more about AP Archive: http://www.aparchive.com/HowWeWork Twitter: https://twitter.com/AP_Archive Facebook: https://www.facebook.com/APArchives Instagram: https://www.instagram.com/APNews/ You can license this story through AP Archive: http://www.aparchive.com/metadata/youtube/1f4f363ffe7f1eefd8410eec7a0c2aa8
