Corrective measures needed if deficit hits 3.1%, says EU
Updated economic blueprint expected to include revised forecast19 September, 14:13
"If it's 3.1% measures will be needed to bring it down to 3%".
The sources said Economy Minister Fabrizio Saccomanni had given reassurances that "measures will be taken to not cross the threshold". On Wednesday Italian government sources said the executive has revised its deficit-to-GDP ratio forecast to 3%-3.1% in its updated economic blueprint, the DEF, which will be presented at a cabinet meeting Friday.
But they stressed it should be possible to stay within the 3% threshold without an additional budget package. Earlier this year, the EC closed an excessive-deficit procedure it had opened against Italy in 2009 after the deficit was 3% last year and forecast to be 2.9% for 2013 in the previous version of the DEF.
The price of not meeting the 3% requirement is stiff - states that are under an excessive deficit procedure and have a debt-GDP ratio of over 60% are obliged to divert public money into trying to reduce that ratio. In Italy's case, escaping the procedure has meant about eight billion euros freed up for public spending.