European Union executive rejects Italian 2019 draft budget ⁰

The European Commission rejected on Tuesday, October 23, Italy’s draft 2019 budget because the plan breaks EU rules in an “unprecedented” way and asked Rome to submit a new one within three weeks or it would face disciplinary action.

The decision by the European Union executive arm is the first time it exercises the power, obtained during the sovereign debt crisis in 2013, to send back a budget of a euro zone country that violates the rules.

Commission Vice President for the Euro Valdis Dombrovskis told a news conference that for the first time, the Commission is obliged to request a euro area country to revise its draft budget plan.

He said the European Commission sees no alternative than to request the Italian government to do so. It has adopted an opinion giving Italy a maximum of three weeks to provide a revised draft budgetary plan for 2019.

The Commission said that the revised budget it expected to receive from Italy should be in line with the recommendation of EU finance ministers from July 13.

Italy sent a letter to the Commission on Monday, October 22, acknowledging that its draft budget was in violation of EU rules, but insisting it would still go ahead with it.

Dombrovskis added that unless Rome changes its draft budget in the next three weeks, the Commission was ready to open a disciplinary process against the country, called the ‘excessive deficit procedure’, based on the lack of progress in cutting debt — an obligation under EU law.