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Italy Eu Budget Agreement

In a speech to the Italian Parliament, which is due to adopt the budget by the end of the year to avoid a new round of negotiations with Brussels, Italian Prime Minister Giuseppe Conte said the “decisive” negotiations had paid off. He said the government had never done anything to “betray the trust” of its voters. The agreement also gives a single EU government the power to delay payments if it believes another country is not meeting its reform commitments. Pierre Moscovici, the head of the economic and financial affairs bloc, who has been fighting for months with Italian populists, said: “Today`s agreement clearly shows that the Commission is not the enemy of the Italian people, as some would like to describe us.” For months, Italy refused to stoop. But on Wednesday, it gave in with billions of euros of late budget. Valdis Dombrovskis, Vice-President of the European Commission in charge of the euro, announced in Brussels that Italy would settle for a budget deficit of 2.04% of gross domestic PRODUCT next year. To put Italy back in place, Brussels, which initially wanted to spend only 1.6% of budgetary expenditure, opted for vinegar rather than honey. In an effort to initiate structural changes in Italy, it has been firm and has made it clear that it will initiate a process that could penalize Italy with costly fines for breaking its agreements. As part of the agreement, the budget was balanced by a forecast for reduced growth, which was revised down from 1.5% to 1% this year and next. EU officials had deemed the Italian government`s expectations for growth of 1.5% too optimistic. Other figures on the EU budget, revenues and expenditure: the Commission initially proposed a recovery fund totalling EUR 750 billion and supported a joint Franco-German request to provide the bulk of the money – EUR 500 billion – in the form of grants to the Member States most economically affected by the COVID 19 pandemic.

It is also the EU budget of eur 1 trillion, also known as the Multi-Year Financial Framework (MFF). The agreement has yet to be approved by the Italian parliament. The European Commission has said it will ensure that the agreement is respected and that it can resume its procedures if it does not. Instead, Conte, who once said there was no “Plan B” on the original draft budget, said that technicians in Brussels had shown how the government really needed less money “than originally planned.” Matteo Salvini, Italy`s powerful deputy prime minister and chairman of the League`s party, had previously said he would not turn away from the 2.4% of spending, “even if the Child Jesus came.” He insisted that it would not allow for even a “comma” of the budget to be changed.