"The Italian public debt remains a crucial vulnerability", which is why Brussels is asking the Italian government "to provide a report on the so-called 'relevant factors' that can justify a trend in the Debt/GDP ratio with a less marked reduction than that requested". This is what Marco Buti, director general of the economic services of the European Commission writes, in a letter addressed to Alessandro Rivera, General Manager of the Ministry of Economy.
With this document, dated 29 October, the Community Executive communicates to the Treasury the request for information on the factors it considers relevant to justify the non-compliance with the debt reduction rule. In essence, this is the last warning before November 21, the date on which Brussels will formally start the infringement procedure against Rome if the Italian government continues to refuse to change the balances of the maneuver by reducing the deficit-GDP 2019, currently forecast at 2,4%.
“This budgetary trajectory, combined with the downside risks to nominal GDP growth, will be incompatible with the need to resolutely reduce Italy's debt-to-GDP ratio – writes Buti – in order to allow the Commission to fully reflect in the your report on Italy's contribution on significant factors, I would like to receive your reply by 13 November at the latest”.
And again: “Such a high public debt limits the government's room for maneuver for more productive spending for the benefit of its citizens. Given the size of the Italian economy, it is also a source of concern for the euro area as a whole”. The Commission therefore fears the risk of contagion to all of Europe.
The Italian response "will be sent to Brussels within the indicated deadline", the Treasury said. The response of the Northern League's deputy prime minister, Matteo Salvini, was less diplomatic: "We are moving forward like trains, we need growth: the EU can also write the letters, we will respond politely".
