July 25, 2021

Italy threatens to tarnish a summit devoted to continue advancing in the architecture of the euro

Italy threatens to tarnish a summit devoted to continue advancing in the architecture of the euro

The Heads of State and Government will hold a session this Thursday during which they will take stock of the progress made at the ministerial level to strengthen the structures of the eurozone, especially with regard to the Banking Union and the strengthening of the powers of the European Stability Mechanism (ESM). The objective of these negotiations is to be able to make the first decisions in this regard at the summit that the leaders will hold in December.

However, the situation that has caused the coalition between Five Star Movement and the Lega with a budget that raises the Italian public deficit to 2.4% of GDP is likely to tarnish the debates of this Thursday given the economic tensions that caused the announcement that Rome will not comply with the agreement and despite the fact that the formal agenda does not include this point.

On this issue, a senior European official has relied on leaders to show "mutual respect" if this issue – one of the "hottest" – finally comes to the table of heads of State and Government, although it has also confident that the session "is dedicated to the progress for the Economic and Monetary Union.

Diplomatic sources also do not rule out that the Italian budget enters the menu of leaders, and also add that the attitude of Rome on this issue "does not help." "It's a topic that has not done anything but start, but it's not the best time" to deal with it, they confess.

In any case, these same sources emphasize that "everyone recognizes" that the case of the Spanish budget is "in another universe" when compared to the Italian case. However, they have not detailed whether the president of the Government Pedro Sánchez will take advantage of the occasion to defend the draft sent to Brussels.

For its part, French diplomatic sources admit that there is "concern" for Italy, but insist that it is not included in the agenda of the debate. These same sources remind that it is Brussels that has to evaluate the draft, but they add that if the Italian Prime Minister Giuseppe Conte brings this issue to the debate to Twenty-seven it will no longer be a bilateral issue.

If finally the debate on the Italian budget sneaks into the lunch on Thursday, will come after Brussels has admitted that it is "very likely" to ask Italy to "correct" the budget plan, as noted by the Commissioner of Budget and Human Resources, Günther Oettinger.

Conte, however, has denied that there is "margin" to modify next year's accounts. "We have studied it very well, I would say that there is no margin," the statement told the media upon reaching the summit, after which it was stated that the draft is "articulated" to "reverse the trend" towards which it was "oriented" the Italian economy.


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