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Eurozone delivers warning to Italy on EU budget rules

Eurozone finance ministers firmly warned Italy on Monday to abide by EU rules on public spending, just days after Rome announced a big spending boost in defiance of Brussels.

Eurozone delivers warning to Italy on EU budget rules
French Finance Minister Bruno Le Maire (left) talks with Italian Minister of Economy and Finance Giovanni Tria in a meeting at the EU headquarters October 1, 2018. Photo: John Thys/AFP

But, meeting in Luxembourg, the ministers also vowed not to rush to judgement on the economic plans laid out by Italy's populist government, which have already spooked markets and put the country's already fragile economy under pressure.

“I just want to make very clear that there are rules and the rules are the same for every state because our futures are linked,” French Finance Minister Bruno Le Maire told reporters ahead of the regular monthly talks with his eurozone counterparts.

However, “rushing is not the best advice,” he said, adding that ministers must move ahead “step by step” before coming down on Italy too strongly.

The fragile state of Italy's economy has reawakened memories of the debt crisis amid dangers that Italy could face punitive measures by its EU partners if it insisted on breaking bloc rules on running excessive deficits and high debt.

“Italy is on everybody's mind,” said Mario Centeno, head of the Eurogroup and Portuguese finance minister.

“I know that we all have questions about it and that we are expecting answers.”

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MONEY

Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.

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