EU finance ministers urge Italy to obey budget rules

Italy warned previous commitments to rein in its debt must be honoured

European Central Bank president Mario Draghi, left,  with  Italy’s economy and finance minister Giovanni Tria during the Eurogroup meeting at the EU headquarters in Luxembourg on Thursday. Photograph: John  Thys/AFP/Getty Images

European Central Bank president Mario Draghi, left, with Italy’s economy and finance minister Giovanni Tria during the Eurogroup meeting at the EU headquarters in Luxembourg on Thursday. Photograph: John Thys/AFP/Getty Images

 

EU finance ministers and officials have warned Italy that it needs to bring its public finances back into line with the bloc’s rules, saying previous commitments to rein in its debt must be honoured.

Arriving at an EU meeting in Luxembourg, France’s economy minister urged Rome to “accept the hand” extended by the European Commission, which last week warned Italy that it was in breach of its obligations while stressing that Brussels was open to discussions on what action needs to be taken.

“My message to Italy is to accept the hand that has been extended,” Bruno Le Maire said. “It’s in the interest of all the euro-zone members to stick with the common rules.”

The message was echoed by German finance minister Olaf Scholz, who told reporters that “in the end the rules are not just something which is written on paper”.

The commission’s announcement last week means Italy is on course to be placed in a formal “excessive deficit procedure”, a process than can in theory end in fines, unless it corrects its budgetary course.

‘Substantial correction’

While the budget situation is not on ministers’ agenda in Luxembourg, Giovanni Tria, Italy’s finance minister, is holding discussions with EU officials in the margins.

Valdis Dombrovskis, the EU commission vice-president responsible for the euro, said “it would require substantial correction of Italy’s fiscal trajectory” to put the country back on track.

Mr Tria said Rome was still in talks with Brussels, and would seek to show that it will “reach our goals”.

Mário Centeno, the president of the Eurogroup of euro-area finance ministers, said “clarity” was needed from Rome so that debt and deficit targets will be achieved. – Copyright The Financial Times Limited 2019