Finance

EU governments to back Commission on budget disciplinary action against Italy

EU finance ministries Thursday evening gave the European Commission the go-ahead to prepare disciplinary action against Italy for breaching the blocs fiscal rules, according to a document obtained by POLITICO.

High-ranking civil servants from the ministries dialed in to a conference call Thursday evening to discuss a damning report on Italys draft budget plans for next year that the Commission published last week.

They agreed with the Commissions assessment that Rome has failed to respect EU rules and “that a debt-based [excessive deficit procedure] is thus warranted.”

The Commission now may propose Italys EDP as soon as December 19 to demand “effective action” from Rome to bring its public finances back in line with the rules.

Under this timeline, EU finance ministers would vote on the EDP proposal in late January when they meet for their regular ECOFIN gathering.

Rome could ultimately face a fine of up to 0.5 percent of economic output — or some €9 billion — if it refuses to comply with the EDP.

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