Italy defends its budget over Commission's concerns
3 November, 2017
Italy defended its 2018 budget in a letter, sent to the European Commission last Monday, saying Brussels did not recognise the extent of its efforts because it used different calculations, news wires reported. The Commission on 27 October asked Italy to clarify why its draft budget for next year implies a structural adjustment below EU requirements and also lower than Italy’s government promised efforts. Italy pledged to cut its structural deficit by 0.3% of gross domestic product, but the Commission said its latest fiscal package showed a cut of just 0.2%. Economy Minister Pier Carlo Padoan (pictured) disputed this in the letter sent to Commission VP Valdis Dombrovskis and Economic and Financial Affairs Commissioner Pierre Moscovici. Padoan said that the difference of 0.1% in the estimated fiscal effort for 2018 according to the Commission’s estimates is due to a different assessment of the cyclical conditions of Italy.
Housing migrants who have poured across the Mediterranean from Libya in recent years requires extra spending despite a reduction in new arrivals, Padoan said, forecasting the cost of its location on Europe’s southern frontier would cost Italy “a significant burden over time of at least 0.25% of GDP.” Italy has the euro zone’s second-highest public debt burden relative to its output, observers recall.
There were more than 193,000 people living in migrant reception facilities across the country at the end of September 2017, compared with 176,000 at the end of 2016, the letter also said.