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If the eurozone budget deficit limit is 3%, why is the European Commission telling Italy it must revise its 2.4% deficit budget?
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The BBC reports that the European Commission has told Italy to revise its budget, saying that the draft presents particularly serious non-compliance with Eurozone rules. Yet the maximum permitted deficit is 3% and the Italian government states that its budget has a deficit of 2.4%. If the Italian budget deficit is less than the maximum permitted 3%, on what grounds is the European Commission telling Italy it must revise its budget?
european-union economy budget italy euro
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gerrit
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The BBC reports that the European Commission has told Italy to revise its budget, saying that the draft presents particularly serious non-compliance with Eurozone rules. Yet the maximum permitted deficit is 3% and the Italian government states that its budget has a deficit of 2.4%. If the Italian budget deficit is less than the maximum permitted 3%, on what grounds is the European Commission telling Italy it must revise its budget?
european-union economy budget italy euro
asked 1 hour ago
gerrit
16.4k560148
add a comment |Â
up vote
4
down vote
favorite
up vote
4
down vote
favorite
The BBC reports that the European Commission has told Italy to revise its budget, saying that the draft presents particularly serious non-compliance with Eurozone rules. Yet the maximum permitted deficit is 3% and the Italian government states that its budget has a deficit of 2.4%. If the Italian budget deficit is less than the maximum permitted 3%, on what grounds is the European Commission telling Italy it must revise its budget?
european-union economy budget italy euro
asked 1 hour ago
gerrit
16.4k560148
The BBC reports that the European Commission has told Italy to revise its budget, saying that the draft presents particularly serious non-compliance with Eurozone rules. Yet the maximum permitted deficit is 3% and the Italian government states that its budget has a deficit of 2.4%. If the Italian budget deficit is less than the maximum permitted 3%, on what grounds is the European Commission telling Italy it must revise its budget?
european-union economy budget italy euro
european-union economy budget italy euro
asked 1 hour ago
gerrit
16.4k560148
asked 1 hour ago
gerrit
16.4k560148
asked 1 hour ago
gerrit
16.4k560148
asked 1 hour ago
gerrit
16.4k560148
asked 1 hour ago
gerrit
16.4k560148
16.4k560148
add a comment |Â
add a comment |Â
2 Answers
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It appears the problem isn't the deficit (the loss from an individual budget) but the size of the existing debt itself. From a report in the Guardian
Italy’s public debt is worth more than 130% of the country’s GDP, the second-highest level in the EU after Greece and more than double the bloc’s limit of 60%.
In effect, the EU don't believe that the budget the coalition have announced represents a serious attempt to control their spending, or to honour previous promises made when receiving EU financial support.
answered 1 hour ago
origimbo
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Italy is not just planning a high budget deficit, it has a very high level of national debt. (As of 2017, it was 131.8% of their GDP, second only to Greece) This makes their deficit riskier than it would be for a country with a lower level of overall debt. Italian banks also own a lot of that debt, and there is a fear that government intervention in the banks (which has already been taking place) could lead to a vicious cycle, collapsing both.
It is worth noting that the Italian government running a substantial deficit is a fairly new phenomenon - they were able to calm investors until recently by running a budget surplus.
Sources:
Wall Street Journal
CNN
answered 1 hour ago
CoedRhyfelwr
716139
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2 Answers
2
active
oldest
votes
2 Answers
2
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
3
down vote
It appears the problem isn't the deficit (the loss from an individual budget) but the size of the existing debt itself. From a report in the Guardian
Italy’s public debt is worth more than 130% of the country’s GDP, the second-highest level in the EU after Greece and more than double the bloc’s limit of 60%.
In effect, the EU don't believe that the budget the coalition have announced represents a serious attempt to control their spending, or to honour previous promises made when receiving EU financial support.
answered 1 hour ago
origimbo
8,86422237
add a comment |Â
up vote
3
down vote
It appears the problem isn't the deficit (the loss from an individual budget) but the size of the existing debt itself. From a report in the Guardian
Italy’s public debt is worth more than 130% of the country’s GDP, the second-highest level in the EU after Greece and more than double the bloc’s limit of 60%.
In effect, the EU don't believe that the budget the coalition have announced represents a serious attempt to control their spending, or to honour previous promises made when receiving EU financial support.
answered 1 hour ago
origimbo
8,86422237
add a comment |Â
up vote
3
down vote
up vote
3
down vote
It appears the problem isn't the deficit (the loss from an individual budget) but the size of the existing debt itself. From a report in the Guardian
Italy’s public debt is worth more than 130% of the country’s GDP, the second-highest level in the EU after Greece and more than double the bloc’s limit of 60%.
In effect, the EU don't believe that the budget the coalition have announced represents a serious attempt to control their spending, or to honour previous promises made when receiving EU financial support.
answered 1 hour ago
origimbo
8,86422237
It appears the problem isn't the deficit (the loss from an individual budget) but the size of the existing debt itself. From a report in the Guardian
Italy’s public debt is worth more than 130% of the country’s GDP, the second-highest level in the EU after Greece and more than double the bloc’s limit of 60%.
In effect, the EU don't believe that the budget the coalition have announced represents a serious attempt to control their spending, or to honour previous promises made when receiving EU financial support.
answered 1 hour ago
origimbo
8,86422237
answered 1 hour ago
origimbo
8,86422237
answered 1 hour ago
origimbo
8,86422237
answered 1 hour ago
origimbo
8,86422237
8,86422237
add a comment |Â
add a comment |Â
up vote
2
down vote
Italy is not just planning a high budget deficit, it has a very high level of national debt. (As of 2017, it was 131.8% of their GDP, second only to Greece) This makes their deficit riskier than it would be for a country with a lower level of overall debt. Italian banks also own a lot of that debt, and there is a fear that government intervention in the banks (which has already been taking place) could lead to a vicious cycle, collapsing both.
It is worth noting that the Italian government running a substantial deficit is a fairly new phenomenon - they were able to calm investors until recently by running a budget surplus.
Sources:
Wall Street Journal
CNN
answered 1 hour ago
CoedRhyfelwr
716139
New contributor
CoedRhyfelwr is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
add a comment |Â
up vote
2
down vote
Italy is not just planning a high budget deficit, it has a very high level of national debt. (As of 2017, it was 131.8% of their GDP, second only to Greece) This makes their deficit riskier than it would be for a country with a lower level of overall debt. Italian banks also own a lot of that debt, and there is a fear that government intervention in the banks (which has already been taking place) could lead to a vicious cycle, collapsing both.
It is worth noting that the Italian government running a substantial deficit is a fairly new phenomenon - they were able to calm investors until recently by running a budget surplus.
Sources:
Wall Street Journal
CNN
answered 1 hour ago
CoedRhyfelwr
716139
New contributor
CoedRhyfelwr is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
add a comment |Â
up vote
2
down vote
up vote
2
down vote
Italy is not just planning a high budget deficit, it has a very high level of national debt. (As of 2017, it was 131.8% of their GDP, second only to Greece) This makes their deficit riskier than it would be for a country with a lower level of overall debt. Italian banks also own a lot of that debt, and there is a fear that government intervention in the banks (which has already been taking place) could lead to a vicious cycle, collapsing both.
It is worth noting that the Italian government running a substantial deficit is a fairly new phenomenon - they were able to calm investors until recently by running a budget surplus.
Sources:
Wall Street Journal
CNN
answered 1 hour ago
CoedRhyfelwr
716139
New contributor
CoedRhyfelwr is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
Italy is not just planning a high budget deficit, it has a very high level of national debt. (As of 2017, it was 131.8% of their GDP, second only to Greece) This makes their deficit riskier than it would be for a country with a lower level of overall debt. Italian banks also own a lot of that debt, and there is a fear that government intervention in the banks (which has already been taking place) could lead to a vicious cycle, collapsing both.
It is worth noting that the Italian government running a substantial deficit is a fairly new phenomenon - they were able to calm investors until recently by running a budget surplus.
Sources:
Wall Street Journal
CNN
answered 1 hour ago
CoedRhyfelwr
716139
New contributor
CoedRhyfelwr is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
edited 8 mins ago
answered 1 hour ago
CoedRhyfelwr
716139
New contributor
CoedRhyfelwr is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
answered 1 hour ago
CoedRhyfelwr
716139
answered 1 hour ago
CoedRhyfelwr
716139
716139
New contributor
CoedRhyfelwr is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
New contributor
CoedRhyfelwr is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
CoedRhyfelwr is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
add a comment |Â
add a comment |Â
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