Austrian Chancellor Sebastian Kurz has set his sights on the Italian populist coalition, saying that if the European Commission does not act, the Italian budget could take Europe “hostage”.
Chancellor Kurz, who currently chairs the rotating presidency of the Council of the European Union (EU), hit out against the Italian populist government budget saying: “Austria is not ready to support the debt of other states, while those states are actively legitimating market uncertainty.”
“Italy will take the European Union hostage if the Commission does not slam on the brakes,” Kurz said, calling on the European Commission, which has been heavily at odds with the Italian government over the budget issue, to act.
The conservative Austrian leader warned that if Italy’s budget goes through, then other countries could follow the Italian lead and cause further market instability, Il Giornale reports.
Italy’s Salvini Vows to Push on with People’s Budget Despite EU Opposition https://t.co/ZNg6cp8Cyl
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The Italian budget looks to increase spending to 2.4 percent of gross domestic product (GDP), largely to pay for the proposed basic income programme, a key policy for the Five Star Movement (M5S).
Despite multiple Commission officials coming out against the budget, including President Jean-Claude Juncker who warned that the budget could lead to “violent counter-reactions”, Interior Minister and leader of the League Matteo Salvini has stood firm on the issue.
Over the weekend Mr Salvini said he would continue to push for the “people’s budget” despite looming threats from credit rating agencies like Moody’s which downgraded Italian credit to Baa3 status on Friday.
Minister of the Treasury, Giovanni Tria backed up Salvini on Monday responding to a letter from Commissioner Pierre Moscovici which outlined his concerns with the budget.
“The Government is confident that the budget manoeuvre will not expose to risk the financial stability to the other member countries of the European Union,” Tria said and added the budget was “a difficult but necessary decision in the light of the persistent delay in recovering to pre-crisis GDP levels and the dramatic economic conditions in which the most disadvantaged sections of the population are situated”.