The standoff between Italy and the EU continues as both sides have not yet overcome their differences regarding Rome’s 2019 budget.
The Italian government will continue talking with the European Commission — the EU’s executive arm — over its spending plans to overcome their differences, the country’s finance minister told CNBC on Tuesday.
Rome and Brussels hit an impasse over Italy’s 2019 budget plans. The anti-establishment government vowed to increase spending in the coming years, challenging previous commitments made between both sides.
At the same time, the additional spending has sparked further worries about Italy’s’ massive debt pile, at 130 percent of debt-to-GDP.
“I expect the dialogue will go on. Of course, we have some disagreement(s) but this does not mean we can’t have a dialogue, constructive dialogue between the commission and Italy,” Giovanni Tria, Italy’s finance chief, told CNBC’s Willem Marx in Brussels.
The European Commission decided to ask Italy to change its 2019 budget plan and to submit the new version by November 13. However, back in Rome, government members have said they will not change their spending plans.
Tria told CNBC that Italy will have to explain its position to the commission. “I don’t want to anticipate the answer,” he said.
The European Commission will announce on November 21, an opinion on all of the euro zone’s draft budgets. If there is no change in the budget plan, Brussels could eventually open an excessive deficit procedure (EDP) — a legal step that aims to help countries respecting European fiscal rules and putting their finances back on track.
Pierre Moscovici, commissioner for economic affairs, told CNBC Tuesday that rules can be interpreted in different ways, but Italy is currently going against them.
“One thing is to be flexible, the other thing is to be against the rules,” Moscovici told CNBC’s Willem Marx. “Our flexibility has always been deployed, and especially for Italy,” he added.
