Saturday 17 August 2019

Fine fight: Salvini to resist EU's €3.5bn debt threat

Mandate: Deputy Prime Minister and League party leader Matteo Salvini at League party headquarters in Milan following its success in the European Parliament elections. Photo: Getty Images
Mandate: Deputy Prime Minister and League party leader Matteo Salvini at League party headquarters in Milan following its success in the European Parliament elections. Photo: Getty Images

Flavia Krause-Jackson

The European Commission is considering proposing a disciplinary procedure for Italy next week over its failure to rein in debt, which could pave the way for a €3.5bn fine, according to an official familiar with the matter.

It would mark an escalation of Rome's budget tussle with Brussels that roiled markets in late 2018. Italian bonds fell on the news, with the yield on benchmark 10-year notes climbing 6 basis points to 2.61pc. The euro extended its decline to fall 0.1pc to $1.1190.

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It would be only one step in a long, convoluted process. The EU has never fined a country over its budget so far and Italy would be given time to comply. Italy's Deputy Prime Minister Matteo Salvini, whose party enjoyed a resounding election victory, said: "I'm told a letter from the European Commission on the Italian economy is on its way. I think Italians gave me and the government a mandate to completely, calmly and constructively re-discuss the parameters that led to unprecedented job instability, unemployment and anxiety."

Bloomberg

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