Sunday , May 22 2022

Spiegel: Italian tragedy – Commission has ended


Monday ends the deadline for the Commission in Italy to submit a new draft budget in Brussels.

However, the Italian government is not willing to compromise, writes Spiegel Online in an article titled "Italian Tragedy". The German website states that "unless a solution is found, Italy may be fined € 3.5 billion. Even if Rome fails to meet and refuses to pay a fine, Europe will face the political and financial crisis ahead of which a dispute with Greece in 2015 would look like a toy.

Italy has only one option to go back to its feet. It must overcome economic stagnation while ensuring the stability of its budgetary positions. The government is mistaken for tax relief and reduces the retirement age. On the contrary, introducing a minimum social contribution is meaningful in Italy, let alone in combination with training programs for the unemployed.

Undoubtedly, the conflict with the Commission, elected by the Italian government, is slowing down growth. The risk of failure or the end of the euro leads to an increase in interest rates. The cost of borrowing will not only increase for the Italian state but also for businesses, thus increasing the investment in growth. In other words, the crisis is filling the crisis.

Leo Leo Mateo Salvini, however, is not interested in improving the situation in Italy and its citizens, but rather in gaining fans of Italians with their public appearances to win the European elections in a year. The consequent action against Brussels therefore brings political benefits to the rulers in Rome, rather than the long-term recovery program for the Italian economy. "

Italian media: Three seek compromise

According to the Italian media, Italian Finance Minister Giovanni Tria is reportedly seeking a compromise with the European Commission.

According to the same information, Mr Three may "cut off" Italian estimates – which predict GDP growth of 1.5% – by as much as half.

Reuters: They are studying a cutting solution like in Greece

An Italian official told Reuters that any revision of the growth calculations in 2019 will seek to convince Brussels that the government will not exceed the deficit target of 2.4% of GDP.

Reuters source added that Mr. Three is also considering an automated cutter solution like the one that was adopted to control Greece's spending on the Memorandum. The mechanism automatically reduces public spending if there is a risk that the target will be exceeded.

However, it is unclear whether the Commission is willing to accept the project Three because Rome does not seem willing to limit the budget deficit, a major source of concern for Brussels.

The 2.4% deficit that the five Star and Lega governments want next year is three times higher than what their predecessors promised.

Information from DW, Reuters

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