Published On: Sun, Mar 31st, 2019

EU news: Jean-Claude Juncker MOCKS Italy over recession – claims Brussels was RIGHT | World | News

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The President of the European Commission took a swipe at Italy’s government coalition, which has clashed with Brussels over its big-spending budget over the past few months. Mr Juncker told Italian talk show Che Tempo Che Fa: “We believe Italy’s growth will only amount to 0.2 percent, which means zero. We have clashed with our Italian friends throughout the past months over this. The growth level announced by Italy turned out to be imprecise, while our forecast was right, we predicted it, all of us.” 

The Eurosceptic and anti-immigration government sitting in Rome had challenged the EU by raising the spending target for 2019 to 2.4 percent of the country’s GDP – three times bigger than the budget previously drafted by the former centre-left government.

This decision triggered a reaction in Brussels, with the Commission urging Rome to scale back, warning Italy may not be able to sustain a similar budget.

Italy’s budget deficit in 2017 was at 2.3 percent, or £34.77billion, and a target set at 2.4 percent would have further raised it to £40.01billion. 

But the leaders of the Lega-Five Star Movement coalition, represented by Matteo Salvini and Luigi Di Maio, said a raised budget would be needed to pay for hefty measures promised during the electoral campaign, including a basic income, the introduction of the flat tax and a revision of the pensionable age.

After months of talks, Brussels officially rejected the budget, threatening to fine the country up to £3billion if it didn’t change its spending forecast amid fears reckless spendings in Rome may destabilise the economy of the whole bloc.

Italy eventually caved in, drastically reducing its deficit target to 2.04 percent of its GDP.

But this move didn’t prevent the country from tipping into recession at the end of 2018, with its economy shrinking by 0.2 percent after a 0.1 percent decline in the third quarter. 

Mr Juncker warned it is up to Rome to find the means to restart the country’s economy as soon as possible.

He said: “I believe Italy knows which are its problems.

“The growth in Italy is 20 years late when compared to Europe’s, its public debt is worrying.”

And when asked whether Italy will be able to heal its economy, Mr Juncker said: “I would like to believe it, but I am not sure.” 

Mr Juncker and Brussels have been often attacked by Mr Salvini for leaving Italy behind and not helping it throughout the migrant crisis.

But the Commission’s president defended what Brussels has done during the past years, when hundreds of migrants were risking their lives to reach Italian shores by dinghies.

He said: “We have fully supported Italy by sending at least €1bn worth of financial help.

“Italy has benefitted of European solidarity, which may have not been sufficient, but it was within the possibility of our budget, we have done everything possible.”     

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