Italy must strive to conduct a ‘responsible’ budget policy, the President of the European Commission Valdis Dombrovskis has explained, in regard with the growing populist and a far-right coalition in the country that has chosen a little known lawyer for a prime minister.
Dombrovskis commented that Italy has the second highest level of government debt after Greece. The Italian debt of EUR 2,3 trillion is 132% of Gross Domestic Product – GDP, the highest coefficient ratio in Europe (with the exception of Greece).
The EU predicts that the Italian government debt will remain around 130% above GDP this year – twice as much as the Union’s 60% red line. Brussels is concerned that the new government in Rome will seek to increase public spending.
The Five Star Movement and the League party reject austerity policies. Expensive financial measures in the document and euro sceptic tone worry financial markets, as well as the nomination of Giuseppe Conte as prime minister.
Dombrovskis commented that the coalition’s plan for drastic reduction of taxes and reversal of pensions would be expensive. “We can only advise to remain economic and fiscal policy, boost growth through structural reforms and maintain the budgetary deficit under control”, he added.
Lega Nord’s leader Mateo Salvini has already rejected several warnings from European partners on the subject. He described as “unacceptable” the warnings of French Economy Minister Bruno Le Maire, who expressed concern about the stability of the euro area.
The reservations reacted aggressively to Manfred Weber’s warning as well, a representative of the conservative party of German Chancellor Angela Merkel and President of the Group of the European People’s Party in the European Parliament. “He should deal with Germany, and we will deal with what is good for Italians”, wrote Salvini on Twitter.
