Editorial of the ” World “. Which will give first ? The discussion on the draft budget, the Italian is starting to look like what the Americans call a chicken game or a ” game of chicken : two drivers push themselves to one another on a road to a single lane betting that one of the two will swerve at the last moment to avoid disaster.
The duel played out between Rome and Brussels is turned up a notch in intensity, Tuesday, October 23, after the decision of the european Commission to demand the Italian government a new version of its budget 2019. In the state, Brussels believes that the encryption provided by Italy is not in conformity with the rules of the stability pact and growth, and is considered as the base intangible to the functioning of the european Union (EU). This is the first time that it activates this procedure, which had been scheduled in the wake of the sovereign debt crisis to prevent a new cataclysm.
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Rome has therefore decided to maintain unchanged its “budget of the people” – according to the expression of the antisystème Movement 5 stars, who was co-director of the Italy with the support of the far-right party, the League. It forecasts a deficit of 2.4% in 2019, while Italy was engaged in June on 0,8 %. This tripling of the deficit, threatening to reduce to naught all the efforts made in recent years to contain a debt that exceeds 132 % of gross domestic product (GDP), the highest in the euro zone after that of Greece and that is more than two times higher than the ceiling provided for in the covenant.
Two logical irreconcilable opposed
The Italian minister of the economy, Giovanni Tria, who was a partisan of letting off steam in Brussels, finds herself in an untenable situation : he admits to be “aware” of infringing the community rules but attempts to justify the slippage by the fact that the country has still not recovered to its GDP before the 2008 crisis. Creation of a citizen’s income, lowering of the retirement age, introduction of a flat rate income tax plan and investment in infrastructure are key measures of a budget that the country is not able to finance without resorting once again to the debt.
Two logical irreconcilable conflict. On one side, what are the Commission’s credibility and the cohesion of the EU that are in the game. The question of the capacity of the third largest economy of the euro area to repay its debt threatens to plunge Europe into a crisis from which it would be difficult to recover. On the other, it is the freedom of a democratically elected government to experiment with different recipes from those of its predecessors – even when most of the measures announced will address that at the margin the main problem of Italy’s low productivity, which hinders the growth.
other confrontations between the EU and a member State have taken place in the past. But, this time, the balance of power leans not necessarily in favor of Brussels. Seven months of the european elections, the Italian government, very popular, laid open on the arrival of a new Commission more conciliatory.
If Brussels must maintain at any price the dialogue to try to curb the budget path Italian, Rome must be aware that a new sovereign debt crisis in Europe won’t the economy transalpine. There is still time to swerve to avoid the fatal collision.
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