The European Commission said
Wednesday that it has decided not to open an infringement
procedure against Italy for excessive debt.
The announcement came after European Commissioners examined a
"technical" agreement reached between Rome and Brussels late on
Tuesday on Italy's budget for 2019.
The Commission had rejected the government's initial draft
budget plan, which saw Italy running a deficit of 2.4% of GDP
next year to finance key pledges and boost sluggish growth,
saying it breached EU rules.
Premier Giuseppe Conte's League-5-Star Movement (M5S)
government proposed bring the deficit down to 2.04% to stop the
EU opening an infringement procedure.
European Commission Vice President Valdis Dombrovskis said
Wednesday that the agreement Brussels had reached with Rome over
Italy's 2019 budget was not perfect.
"The solution on the table is not ideal," he said.
"It does not provide long-term solutions to the Italian
economy's problems, but it enables us, for now, to avoid opening
a debt procedure, as long as the negotiated measures are fully
applied".
The government had said it is not willing to drop its two key
pledges, the 'citizenship wage' basic income for job seekers and
the 'quota 100' pension reform that will bring down the
retirement age for many people.
European Economic Affairs Commissioner Pierre Moscovici
hailed the agreement as "a victory of political dialogue".
He said the Commission had preferred to adopt the path of
negotiation rather than "confrontation".
He said that under the agreed solution, Italy's structural
deficit will be no worse than previously, compared to a
deterioration of 0.8% under the government's initial budget
plan.
Conte is set to report to the Senate after the breakthrough.
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