Italy offers to lower deficit, but EU says it’s not enough

A new 2019 budget plan from the Italian government to reduce its deficit is still not enough to secure EU approval, Economic Affairs Commissioner Pierre Moscovici said on Thursday.

Italy offers to lower deficit, but EU says it's not enough
Italian PM Giuseppe Conte (L) shakes hands with EU Commission President Jean-Claude Juncker. Photo: Emmanuel Dunand/AFP

“It's a step in the right direction, but nonetheless I have to say we're still not quite there. There are still more steps to take,” the EU's Moscovici told French senators in Paris, after Rome's latest proposal to avoid financial penalties from Brussels.

He was speaking the day after Prime Minister Giuseppe Conte made an offer to the European Commission to lower Italy's deficit to 2.04 percent of GDP in 2019. 

The European Commission in October rejected the big-spending budget submitted for approval by the Italian coalition government of the League and the Five Star Movement. The budget includes a universal basic income of €780 for the least well-off to help them get back into the job market.

READ ALSO: Here are the main things included in Italy's 'people's budget'

Italian Prime Minister Giuseppe Conte (C) with his deputies Luigi Di Maio (L) and Matteo Salvini (R). Photo: Filippo Monteforte/AFP

After meeting with European Commission President Jean-Claude Juncker on Wednesday, Conte said that additional resources had given Italy more financial wriggle room. “Technical work allowed us to obtain a margin of negotiation because we have recovered some financial resources,” said Conte.

He said that the budget could be revised down from a proposed deficit of 2.4 percent to 2.04 percent, due to the “recovered” financial resources.

The move comes after EU officials warned Italy that a previous proposed reduction in the public deficit to 2.2 percent would still be insufficient to avoid EU sanctions.

“The European Commission will now evaluate the proposals received this afternoon. Work will continue in the coming days,” a commission spokesperson said.

READ ALSO: Italy's budget battle with Brussels: What you need to know

Photo: Gerard Cerles/AFP

If agreement is not reached, Italy could find itself the target of an EU excessive deficit procedure, which could ultimately lead to fines of up to 0.2 percent of the nation's GDP.

The offer of a budget deficit of 2.04 percent remains considerably higher than the 0.8 percent the previous centre-right government had planned.

“My government wants to keep the confidence of Italians, but it is also reasonable,” said Conte. “We have put on the table a serious and reasonable proposal and we are confident that it can be concluded, in the interests of all and in particular Italians, with a positive solution.”

In its negotiations with the EU, Italy has highlighted recent developments in France where President Emmanuel Macron's concessions to “yellow vest” protestors threaten to blow-out deficit targets.

READ ALSO: Italian government says its budget will prevent 'scenes like we've seen in Paris'

European Commissioner for Economic Affairs Pierre Moscovici on Wednesday told AFP that France and Italy would not be held to different standards on their budget deficits.

“There is no question of privileged treatment for some and exaggerated toughness for others,” Moscovici said on the sidelines of a financial conference in Frankfurt.

“The rules are the same for everybody,” he added, while noting differences in the situations between France and Italy. Italy's existing debt burden was much heavier than France's, at 130 compared with 100 percent of GDP, he said.

Brussels has said a high deficit would only add to Italy's already massive debt burden and not deliver the growth promised after years of austerity measures. 



Second Italian minister takes anti-mafia reporter Saviano to court

Just weeks after going on trial in a case brought by Prime Minister Giorgia Meloni, Italian investigative journalist Roberto Saviano was back in court on Wednesday facing allegations of defamation lodged by Meloni's deputy, Matteo Salvini.

Second Italian minister takes anti-mafia reporter Saviano to court

Deputy Prime Minister Salvini, whose far-right League party is a key member of Meloni’s coalition, is suing the journalist for calling him the “minister of the criminal underworld” in a social media post in 2018.

In November, Saviano went on trial in a case brought by Meloni for calling her a “bastard” in 2020 over her attitude towards vulnerable migrants.

READ ALSO: Press freedom fears as Italian PM Meloni takes Saviano to trial

Meloni’s far-right Brothers of Italy party was in opposition at the time, but won September elections on a promise to curb mass migration.

Saviano, known for his international mafia bestseller “Gomorrah”, regularly clashes with Italy’s far-right and says the trials are an attempt to intimidate him.

He faces up to three years in prison if convicted in either trial.

“I think it is the only case in Western democracies where the executive asks the judiciary to lay down the boundaries within which it is possible to criticise it,” Saviano said in a declaration in court on Wednesday.

He said he was “blatantly the victim of intimidation by lawsuit”, on trial “for making my opinion, my thoughts, public”.

READ ALSO: What you need to know about press freedom in Italy

Press freedom watchdogs and supporters of Saviano have called for the suits to be scrapped. Meloni refused in November, despite criticism that her position of power makes it an unfair trial.

Armed guard

Saviano has lived under police protection since revealing the secrets of the Naples mafia in 2006.

But when Salvini was appointed interior minister in a previous government in June 2018, he suggested he might scrap Saviano’s armed guard.

The writer reacted on Facebook, saying Salvini “can be defined ‘the minister of the criminal underworld’,” an expression he said was coined by anti-fascist politician Gaetano Salvemini to describe a political system which exploited voters in Italy’s poorer South.

READ ALSO: Anti-mafia author Saviano won’t be ‘intimidated’ by Salvini

He accused Salvini of having profited from votes in Calabria to get elected senator, while failing to denounce the region’s powerful ‘Ndrangheta mafia and focusing instead on seasonal migrants.

Salvini’s team are expected to reject any claim he is soft on the mafia.

Saviano’s lawyer said he will call as a witness the current interior minister Matteo Piantedosi, who at the time was in charge of evaluating the journalist’s police protection.

The next hearing was set for June 1st.

Watchdogs have warned of the widespread use in Italy of SLAPPS, lawsuits aimed at silencing journalists or whistleblowers.

Defamation through the media can be punished in Italy with prison sentences from six months to three years, but the country’s highest court has urged lawmakers to rewrite the law, saying jail time for such cases was unconstitutional.

Saviano is also being sued by Culture Minister Gennaro Sangiuliano in a civil defamation case brought in 2020, before Sangiuliano joined the cabinet.

A ruling in that case could come in the autumn. If he loses that case Saviano may have to pay up to 50,000 euros in compensation, his lawyer told AFP.

Italy ranked 58th in the 2022 world press freedom index published by Reporters Without Borders, one of the lowest positions in western Europe.