Italy prepares for EU deficit infringement procedure
(MENAFN) On Wednesday, the Italian economy Ministry acknowledged that the European Commission would initiate the deficit reduction procedure against Italy and several other European countries. However, the ministry asserted that Italy's plans would suffice to fulfill the bloc's requirements.
“It is granted that the European Commission will recommend the Council to open an excessive deficit procedure against us as well as several other countries," he stated in a parliamentary hearing. "Us, France and 10 others."
However, the ministry stated that Italy's budget plan, disclosed last year and up for review next week, already integrates measures that align with EU requirements to gradually close the fiscal gap.
Under the deficit reduction procedure, Italy will be mandated to trim its structural deficit, a gauge of the deficit that excludes one-off factors and business cycle fluctuations, by at least 0.5 percent of gross domestic product annually.
EU regulations on deficit and debt reduction, designed to prevent excessive divergence in member states' finances, afford more flexibility in reduction strategies if member states undertake reforms and investments in areas prioritized by the EU.
The Italian government currently anticipates a deficit-to-GDP ratio for this year of 4.3 percent, surpassing the 3 percent limit stipulated by European regulations.
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