Germany’s finance minister has cautioned the Italian government that the EU’s fiscal guidelines are not “just something that’s written on paper”.
The feedback took place just a few instances before a meeting of euro zone finance ministers on Thursday in Luxembourg. The group of 19 finance ministers is having a general discussion on the fiscal situation of the eurozone and will be taking stock of the Italian public debt scenario.
The European Commission, the EU’s executive arm, announced last week that disciplinary proceedings, known as an “Excessive Deficit Procedure” against Italy are warranted since it’s breaking fiscal guidelines over its rising public debt. If an EDP went ahead, Italy could face a fine of around 3 billion euros ( $3 .4 billion), based on some records.
The move comes after months of battling between Italy’s coalition government and the Commission over Italy’s vow to increase spending and cut taxes.
Italian Prime Minister Giuseppe Conte stated he is actually confident that Italy can avoid disciplinary action, known as an Excessive Deficit Procedure ( EDP ) and informed the ANSA newsgroup that Italy will be able to deal with EU concerns. He added that the country’s debt will be diminished “faster than even we expected .”
On his way into the Eurogroup meeting on Thursday afternoon, Germany’s Finance Minister Olaf Scholz told CNBC’s Silvia Amaro that Italy cannot remain to flout EU regulations as if these didn’t matter.
“In the end the rules are not just something that are written on paper, they have reasons,” said Scholz .
The European Commission has approximated that Italy’s investing to service its debts in 2018 turned out to be 2 .2 billion euros more than expected in its 2018 spring forecast.
As he arrived in Luxembourg , the French finance minister , Bruno Le Maire , told CNBC that Brussels had been working hard to fix Italy’s budget blowout and it would be wise for the Italian government to fix their finances and “seize the hand given by the European Commission .”
Le Maire added that it was in the attention of all eurozone members to stick to budget rules.