mishtalk.com / Mike “Mish” Shedlock / February 22, 2017
In a move bound to help Beppe Grillo’s Five Star movement, Brussels Warns Italy to Cut Public Debt by April.
The European Commission said on Wednesday that Italy’s debt represented “a major source of vulnerability” as it urged Rome to meet its commitments to adopt pension reforms and other “structural measures” worth 0.2 per cent of gross domestic product.
Valdis Dombrovskis, vice-president of the commission in charge of eurozone issues, said: “as of today there would be a case to open an excessive deficit procedure for Italy”. Formal decisions on whether Rome has done enough to meet its obligations would be made in May, he said.
“I sincerely hope and believe that this fiscal effort can be delivered on time,” said Pierre Moscovici, the EU economy commissioner.
Brussels noted that Germany’s current account surplus, which is estimated to have hit a record 8.7 per cent of GDP in 2016, was “not healthy” for the euro area, creating “very significant distortions both economically and politically”. But the commission held back from applying additional pressure on Berlin to boost spending.
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