The clock is ticking for Italy as the European Commission on Wednesday has launched an infringement procedure against the country.
The increase of its public debt, the highest in Europe after Greece, is considered in breach of EU fiscal rules, but there is still room to avoid sanctions if the government gives signs to change its policy
Pierre Moscovici, European Commissioner who announced the news, made clear that this is not the final say.
“Of course as always, with all member states we are looking at new data that could change this analysis. So my door is open.”
The decision is set to inflame the relations between Brussels and Rome once again.
In October 2018, the Commission had already warned Italy over its debt, triggering harsh reactions from some representatives of the League, one of the parties in the country’s ruling coalition. They consider the expansive policy necessary to fight poverty in the country.
“Moscovici should understand that the bullying approach is not the correct one. Bullying the five million poor in Italy is not the correct approach. He should come to an understanding with this government to build up Italian and European responses that will help the five million of poor and the country to grow,” Angelo Ciocca, Italian MEP the League told Euronews.
In order to avoid sanctions, Italy is required to make budget cuts of around €3-4 billion. But the government has to act fast. The representatives of EU countries have two weeks to decide whether or not to endorse the recommendation of the European Commission.
“The situation of Italy within the [European] Council is at the moment once of rather isolation, instead of support. We know from the past that there is a reluctant by member states and governments in general to punish other fellows but this time alliances may be more difficult,” explained Cinzia Alcidi, an economist at CEPS.
The fate of the country will depend on the capacity of Rome to negotiate with the Commission. This is a hard task for the government where the two coalition parties seem divided over many issues, including the respect of EU fiscal rules.