Italy's debt needs to come down, EU's Moscovici says
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The European Union wants to avoid a "crisis" with Italy over the country's spending plans. However, Brussels also needs to ensure the euro zone economy remains stable, the European Commissioner for economic affairs told CNBC on Thursda y.
"We want to avoid a crisis with Romeâ¦ but at the same time we need, absolutely, to make sure that the Italian debt decreases and the stability of the euro zone is ensured," Pierre Moscovici, European Commissioner, told CNBC's Nancy Hungerford in Bali.
Italy's public debt represents 130 percent of gross domestic product and totals 2.3 trillion euros ($2.6 trillion). There are strong concerns that the intentions from the new government in Rome to raise spending, and subsequently the debt pile, could brought up another debt crisis in the euro zone.Kazuhiro Nogi | AFP | Getty Images European Commission Commissioner Pierre Moscovici
"This is why I would say this is a delicate matter," Moscovici added.
Italy and the European Commission have been embroiled in an ongoing battle of words over Rome's 2019 budget. The anti-establishment Italian government has said that it will change previous reforms and raise public spending, bringing the country's deficit to 2.4 percent of GDP in 2019 â"a number that Brussels has already criticized for being three times higher than what Italy had agreed to earlier this year.
"We will have to receive next week the Italian budget. I c annot jump into conclusions," Moscovici said.
"What I can see from what I know already is that there is a risk of what we call a 'significant deviation' according to our rules, which are common to all euro zone members."
The 2019 budget is set to point to an increase in structural deficit, which excludes growth, by 0.8 percentage points. Rome had told Brussels that the structural deficit in 2019 would be lowered by 0.6 percentage points.
"I urge the Italian authorities to be closer to the medium-term objectives," Moscovici said.
Last week, Italian Deputy Prime Minister Matteo Salvini called Moscovici and the President of the European Commission, Jean-Claude Juncker, the "enemies o f Europe".
"I am not going to respond to that kind of provocation," Moscovici said.
Italy is due to submit its 2019 budget plan to the EU by next Monday. The European Commissioner has until the end of November to present its opinion on the financial plan.Source: Google News Italy | Netizen 24 Italy