EC warns Italy on budget, pensions, debt

(ANSA) - Brussels, November 22 - The European Commission has warned Italy not to water down its 2018 budget bill in a letter to the government in Rome, EC Vice-President Valdis Dombrovskis told ANSA on Wednesday. "We recognise that Italy has made many efforts recently for competitiveness and growth, (but) it is crucial that the 2018 budget is adopted without the main measures being watered down," said Dombrovskis, who wrote the letter to Italy along with Economic Affairs Commissioner Pierre Moscovici.
    "It should be applied in a rigid way to hit the target of a structural (deficit reduction) of 0.3% of GDP". The Commission said Wednesday that it had written a letter to Rome saying that it intends to reassess Italy's compliance with the debt reduction benchmark in spring 2018 on the basis of validated data for 2017 and in the light of the final budget to be adopted by the Italian Parliament in December 2017.
    The Commission said that Italy was one of five EU countries, along with Belgium, Austria, Portugal, and Slovenia, whose 2018 budget plans risk a "significant deviation" from the adjustment paths towards their medium term targets. It added that "in the case of Italy, the persisting high government debt is a reason of concern".
    Dombrovskis told ANSA Wednesday that he and Moscovici had also warned Italy against reversing reforms of its pension system in the letter to Rome.
    "Italy must stick by the important structural budget reforms, such as the pension reform, which support the long-term sustainability of Italy's debt," Dombrovskis said.
    "We have a good relationship with (Italian Economy Minister Pier Carlo) Padoan and his team.
    "We'll evaluate the respect of the debt criteria again in the spring". Italy's biggest trade-union confederation, the leftwing CGIL, has announced it will stage demonstrations on December 2 as it is not satisfied with government adjustments offered in relation to an increase in the retirement age to 67, set to kick in in 2019.
    The CGIL said not enough has been done in terms of exemptions for people doing heavy jobs.