The European Commission has demanded a new budget from the Italian populist government that complies with EU rules with the deadline approaching on Tuesday.
The Commission made the demand late last month after rejecting the Italian budget following weeks of disputes between the populist Italian coalition government and Brussels.
The EU body recently released a new Autumn economic forecast which claims a slower growth rate for the Italian economy, 1.1 per cent, than the Italian forecast of 1.5 per cent with the Commission saying their forecast could remain the same over the next two years, SVT reports.
The trend, according to the report, of slow growth extends not just to Italy but across the entire EU economy with the Commission basing their forecasts on U.S. trade conflicts, factors of economic uncertainty, and other global issues.
Italian PM Warns ‘No Plan B’ After Brussels Rejects Italian Budget https://t.co/F0wYs3nWUC
— Breitbart London (@BreitbartLondon) October 23, 2018
While the deadline approaches on Tuesday it is unclear whether the Italians will present a compliant budget as Prime Minister Giuseppe Conte claimed there was no “plan B” after Brussels rejected the budget in October.
Finance Minister Giovanni Tria even questioned the EU forecast Thursday accusing the Commission of using “inadequate and partial analysis.”
The EU report has also had a negative effect on Italian bonds, with the 10-year bond rising up to 3.41 per cent, although the bond-spread with German bonds has remained below the 300 mark.
Last month, populist Interior Minister Matteo Salvini commented on the German-Italian bond spread and accused financial speculators of attacking Italy saying, “If I wanted to think badly I would say that behind the [bond] spread of recent days is a move by speculators like [George] Soros who are aiming for the failure of a country, to buy its remaining healthy businesses at a bargain price.”
Part of the new budget will go toward the citizenship income programme, a pillar of policy for the Five Star Movement who have seen a slump in the polls compared to Salvini’s League.