The European Commission has
decided to reject the Italian budgetary planning document and to
ask for a new one which must be sent to Brussels within three
weeks, the EC said Tuesday.
The rejection was widely expected because of what the EC sees
as an unacceptably high deficit of 2.4% of GDP next year.
The EC said last week this amounted to an "unprecedented"
breach of the Stability and Growth Pact.
The EC also says the budget's growth forecasts are
unreasonably optimistic.
The spread between Italian and German 10-year bond yields, a
gauge of investor confidence, rose back to 310 points with a
yield of 3.52% after the EC's thumbs down.
Premier Giuseppe Conte said ahead of the expected European
rejection of the 2019 budget plan that "there is no plan B."
Taking to Bloomberg, he said "I have said that the deficit at
2.4% of GDP is the ceiling. I can say that this will be our
ceiling".
Asked if there might be substantive change to the budget
after the EC's No, Conte said "for me that would be difficult, I
couldn't accept it".
Conte added that "we are not gamblers gambling our children's
future on the roulette wheel" and stressed that "economic growth
is the best way to get out of the debt trap".
He added: "I can assure you that this executive will not take
Italy out of Europe. We feel at home in Europe and think the
euro is and will be our currency, the currency of my son who is
11 and that of my grandchildren".
Conte also said that the government would conduct a spending
review if necessary.
"We are ready to make spending cuts in 2019," he said.
There is no turning back on the 2019 budget plan, Deputy
Premier Matteo Salvini said ahead of the EC rejection.
"The only organism that can improve the budget is the Italian
parliament," he said.
"We're not going to take even a cent from the pockets of the
Italians. We listen to everyone but we won't go back".
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