EU warns Italy on budget but walks a fine line

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EU warns Italy on budget but walks a fine line

2018-10-19 03:34 Last Updated At：03:40

The European Union handed Italy a stinging letter Thursday warning that the nation's significantly higher deficit targets represented a deviation "unprecedented in the history" of EU budget rules — but still offered reassurances that the bloc was "not an adversary of Italy."

The dual message underlines the EU's balancing act as it tries to prod Italy's new populist government back into compliance with EU financial standards without enflaming the anti-Europe rhetoric that is coursing inside Italy.

Italy has until Monday to respond to the letter, which is likely to set off a back-and-forth that will go on for weeks, if not months. Italy is one of the 19 nations using the shared euro currency, so its financial decisions and actions can affect the fortunes of the euro and subsequently the finances of other EU nations.

Speaking to reporters in Rome, EU budget chief Pierre Moscovici said the EU Commission and many other EU nations are worried by Italy's spending plans, which will see the country's budget deficit rise to 2.4 percent of GDP, three times higher than agreed upon by the previous government.

Moscovici called the difference "unprecedented."

But he also said the commission would not interfere with Italy's choices, saying its role was one of "a referee, not an adversary, of Italy."

"I cannot imagine a Europe without Italy or Italy without Europe," Moscovici said. "Nor a euro without Italy or Italy without the euro."

Italian Economics Minister Giovanni Tria emphasized that the government's draft budget, sent to Brussels on Monday, was aimed at increasing growth. He said he hoped that when Italy explained the structural reforms included in the bill that would bring the two sides' positions closer together.

EU Commission chief Jean-Claude Juncker said the EU has always been generous with Italy when it comes to assessing its budget, and that EU leaders had already approached him to make sure not to be too flexible on strict deficit and debt levels when combing through the details of Italy's spending plans.

"I had some colleagues on the phone say they don't want us to add flexibility to already existing flexibility," he said, adding that the EU has no intention of doing so.

In a press conference in Brussels, Italian Premier Giuseppe Conte denied that the spending deviation was "unprecedented," but noted that Italy had several days to offer a formal response to the commission's concerns.

Political analyst Wolfango Piccoli of Teneo Intelligence said the commission is facing a tough dilemma and must walk a fine line with Italy's budget.

"A harsh rebuke and the threat of further measures would likely boost the popularity of the populist coalition government," giving Italy's governing parties "an invaluable narrative to use during the campaign for the European elections in May," Piccoli said. "In contrast, a more lenient approach would further undermine the credibility of the EC's tortuous fiscal rules and irritate some member states from Northern Europe."

Conte will fly home to another controversy. The head of one of Italy's two ruling populist parties says unauthorized changes were made to the draft budget, suggesting a possible rift in the coalition government.

Luigi Di Maio, the head of the 5-Star Movement, on Thursday threatened to lodge a formal criminal complaint. He told a late-night talk show that the draft budget presented to President Sergio Mattarella's office contained a proposal to extend a tax amnesty on money held abroad and brought back to Italy. The 5-Star Movement opposes such a move, as it risks laundering "corrupt or mafia capital."

Matteo Salvini, the leader of the League party, called the accusation "surreal."

Conte said he would review the draft budget line by line when he returns to Rome.

Macron outlines his vision for Europe to become an assertive global power as war in Ukraine rages on

2024-04-26 00:49 Last Updated At：00:52

PARIS (AP) — French President Emmanuel Macron warned Thursday that Europe could “die” if it fails to build its own robust defense as Russia’s war in Ukraine rages on, or if it fails to undertake major trade and economic reforms to compete with China and the U.S.

Macron urged Europeans to become more ambitious in a fast-changing world to face the challenges of war, fierce trade competition, energy scarcity, climate change and increasing authoritarianism.

In a nearly two-hour speech at Sorbonne University in Paris, Macron said that the continent is divided and “too slow and lacks ambition” at a time when the 27-member European Union needs to become a superpower, defend its own borders and speak with one voice if it wants to survive and thrive.

“Our Europe today is mortal,” Macron said. “It can die and that depends solely on our choices,” he added. He called on people to make those choices now because, “it’s today that Europe is between war and peace.”

Russia's full-scale invasion of Ukraine, now in its third year, is an existential threat and Europe isn't armed enough to defend itself when “confronted by a power like Russia that has no inhibitions, no limits,” Macron said.

‘Our ability to ensure our security is at stake," Macron said. “Russia mustn’t be allowed to win.”

Europe now has the “good fortune” of having the Biden administration’s commitment to supporting Ukraine, Macron said. But, in a year of key elections around Europe, in the U.S. and elsewhere, support may fragment or disappear entirely, he added.

“Europe must become capable of defending its interests, with its allies by our side whenever they are willing, and alone if necessary,” Macron said.

Strong armies, a European rapid intervention program and force, tanks, a missile shield and other weapons, produced in Europe, will need the support of “a joint diplomatic force that will speak with one voice and build bridges with Africa and Latin America,” the French leader said.

“Only then will Europe show that it's not a United States’ lap dog, and that it also knows how to talk to other regions of the world,” he said.

France has been a firm supporter of Ukraine in its fight against Russian aggression, and Macron has often clashed with other Western leaders as he has insisted that Europe must stand by the country at any cost. The French president alarmed European leaders by saying recently that sending Western troops into Ukraine to shore up its defenses shouldn’t be ruled out.

Referring to trade practices of China and the U.S., Macron said “the two world powers have decided not to respect the rules of global trade” by shoring up protections and subsides while Europe’s industry remains open and is stuck in overregulation.

“Let’s do the same, we are in competition,” Macron said.

“We must buy faster, we must produce more and we must buy more that is made in Europe. That is key,” Macron said.

Thursday's speech came less than two months before a pivotal European Parliament election.

Macron, an avid advocate of a united and assertive Europe, also rallied support for his centrist Renaissance party before the June 6-9 vote as far-right parties lead the moderate coalitions in the polls. He called for safeguarding democratic values as the “authoritarian model” was becoming “more popular” across the continent.

The war in Ukraine and immigration are top priorities for European Union voters, according to polls. Far-right parties have gained support by criticizing Macron’s government policies on both issues. Macron acknowledged divisions on immigration policies, including on asylum and deportation rules for those who have arrived to Europe illegally.

He emphasized the need for an effective response and Europe-wide coordination for curbing illegal immigration, closer cooperation with immigrants' countries of origin and a unified, relentless fight against human traffickers.

Macron criticized the idea of striking an agreement, as Britain as done, with countries in Africa and elsewhere to transfer immigrants there.

“This is a betrayal of our values that ultimately leads us to dependency on other counties,” Macron said.

The British government earlier this week approved a law allowing the deportation of some migrants who enter the country illegally to Rwanda.

Macron lost his majority in France’s most influential house of parliament, the National Assembly, after the 2022 election to the far-left coalition and the far-right National Rally party.

The social situation in France remains tense as Paris prepares to host the Olympic Games this summer, amid protests from teachers and police officers, and farmer demonstrations in recent weeks. The protests follow huge rallies last year against Macron’s ultimately successful proposal to increase the retirement age from 62 to 64.

Barbara Surk reported from Nice, France. Lorne Cook contributed to this report from Brussels.

EU warns Italy on budget but walks a fine line

News

EU warns Italy on budget but walks a fine line

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