Page 8 - ARUBA TODAY

A8 WORLD NEWS
Wednesday 24 OctOber 2018

EU rejects Italy's budget, raising stakes in dispute

By RAF CASERT Maio wrote on Facebook.
COLLEEN BARRY The hard-line stance of the
BRUSSELS (AP) — The Euro- two populist leaders, Di
pean Union set up a high- Maio and Salvini, to some
stakes battle with Italy, degree defies a more con-
one of the bloc's biggest ciliatory position by the
economies, over who has country's economy minis-
final control over a mem- ter, who signaled in his re-
ber state's budget after the sponse to Brussels that Italy
executive Commission took would be willing to change
the unprecedented step plans if it didn't achieve the
of ordering the country to desired results.
revise its public spending But both populist leaders
plans. also have something to
In a move that escalates a gain with their voter base
monthlong standoff, the EU by leveraging a confronta-
said the populist govern- tion with the EU, which has
ment's budget for next year been seen as the bogey-
is out of line and breaks man requiring austerity cuts
earlier promises to lower in recent years. European
public debt. parliament elections loom
Italy's debt load is the sec- Left to right: vice premier Luigi Di Maio, premier Giuseppe Conte and vice premier Matteo Salvini, in the spring and Di Maio
ond-highest in Europe, af- pose as they arrive for a press conference at Chigi's Palace, in Rome, Saturday, Oct. 20 2018. and Salvini are jostling to
ter Greece, and there are Associated Press gain influence before then.
worries that losing control Markets were quick to pun-
of spending could rekindle can be destabilized when The Commission wrote in its it 30 billion euros ($34 bil- ish Italy over the dispute,
financial turmoil in Europe. one member state loses official opinion that "given lion) worth of wiggle room with the government's cost
The populist Italian gov- control of its finances, like the size of the Italian econ- in its spending plans, as well of borrowing on interna-
ernment says the sharp in- Greece did a decade ago, omy within the euro area, as investment funds. tional bond markets rising
crease in spending is need- the other nations want to the choice of the govern- The EU's executive wants and the Milan stock market
ed to jumpstart growth af- have some say over exces- ment to increase the bud- the Italian government falling 1 percent.
ter years of malaise. sive spending, especially get deficit ... creates risks of to produce a new bud- Italy's standoff with Brussels
"We see no alternative but when it concerns the re- negative spill-overs for the get proposal within three has had its first impact on
to request the Italian gov- gion's third-biggest econo- other euro area member weeks. Italy argues the corporate Italy, with credit
ernment to revise its draft my. states." spending increase is need- rating's agency Moody's
budgetary plan," EU Com- The EU Commission said it EU Financial Affairs Com- ed to get growth going and downgrading a slew of
mission Vice President Val- had no choice after Italy missioner Pierre Moscovici fulfil electoral promises. The companies and banks just
dis Dombrovskis said. proposed a deficit of 2.4 highlighted how Italy's bud- extra money will be spent days after lowering Italy
Italian Deputy Prime Minis- percent of GDP for next get would hurt its own peo- on restoring pensions to as one notch to just one level
ter Matteo Salvini was quick year — three times more ple by saddling the young many as 400,000 people above junk status.
to warn the EU to keep its than what it had previously with higher debt payments. whose retirement age had Those hit include state-con-
hands off. "No one will take targeted. The higher deficit The cost of servicing Ital- been pushed back and on trolled Eni oil company, the
one euro from this budget." means Italy would not fulfil ian public debt is already a basic income for some Italian Post Office, defense
The confrontation laid bare its promise to lower its debt, equal to the country's en- job-seekers. contractor Leonardo and
the fundamental problem which is over 130 percent of tire spending on education "We know that we are the 12 banks.
within the eurozone where GDP and more than twice — 65 billion euros a year. last line of defense for social Eni, which is 30-percent
19 EU nations share the the EU limit of 60 percent. "Italy must continue its ef- rights of Italians. And for this government-owned, said
same currency, yet govern- Without a tough stance on fort to lower its debt be- we won't let you down. We in a statement that the
ments maintain autonomy the issue, the EU could see cause it is the enemy of the know that if we would give action was taken despite
over spending priorities and its credibility erode and economy," he said. up, that the experts for the "favorable prospects for
the EU has been reluctant markets could lose confi- The EU said it had already banks and austerity would the company and the ex-
to enforce spending limits. dence in its ability to keep been lenient enough with return. So we will not give pectation of strong credit
Since the euro economy public spending in check. Italy in recent years, giving up," Deputy Premier Luigi Di metrics."q