Eurozone ministers line up behind EU in Italy budget dispute
Eurozone Eurozone ministers line up behind EU in Italy budget dispute
Bruno Le Maire says future of euro at stake as finance chiefs urge Rome to rethink policies
Several eurozone finance ministers have come out to back Brussels in a row with Italyâs populist government over a budget that has been deemed to break the rules of the common currency bloc.
Franceâs finance minister, Bruno Le Maire, warned that the future of the euro was at st ake as he urged the Italian government to reach an agreement with the European commission.
âThe wise path is the path of dialogue, exchange of views, to find the best solution for the eurozone as a whole, for the Italian government and for our common currency,â he said on Monday as he arrived at a meeting of eurozone finance ministers. âFor what is at stake now is our common currency.â
Italy doubled down on its refusal to change the budget, a week before a deadline to submit new plans to the European commission. âNo little letter will make us back down. Italy will never kneel again,â Italyâs powerful interior minister Matteo Salvini has said.
Italian deputy prime minister Luigi di Maio told the Financial Times the rest of Europe should copy Italyâs expansionary public spending plans. âIf the recipe works here, it will be said at a European level, we should apply the recipe of Italy to all other countries.â
The commission rejected Italy âs draft 2019 budget last month â" although other member states, including France and Germany, have broken the rules in the past without sanction. Italy must submit a new plan by 13 November and will hear Brusselsâ verdict on 21 November, when the commission delivers an assessment on the budgets of all eurozone members.
If the commission decides to fine Italy, it risks deepening conflict with Rome ahead of European elections in May 2019, which some EU insiders fear could boost anti-EU parties.
Italy believes it can reduce public debt â" the second highest in the EU at 131% of Italian GDP â" by more government spending to stimulate higher economic growth. The European commission, responsible for monitoring eurozone spending plans, thinks Romeâs assumptions are âoptimisticâ.
The commission has won support from the eurozoneâs traditional budget hawks, such as the Netherlands. Peter KaÅ¾imÃr, Slovakiaâs finance minister, urged Italy not to pursue â reckless policiesâ. He said he feared that Italyâs approach would put at risk the goal to âcomplete EMU architectureâ.
Nerves about Italy are playing into slow-moving efforts to overhaul the rules underpinning economic and monetary union. French president Emmanuel Macron wants an agreement on a banking rescue system before the European elections, but has been frustrated by Germanyâs go-slow, less ambitious approach.
Le Maire said he hoped decisions would be taken in December. â[The eurozone] is the heart of the European project and it needs to be strengthened.âTopics
- European Union
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