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Italy wants to enlist France, Spain in push to change EU fiscal rules

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By Reuters
Italy wants to enlist France, Spain in push to change EU fiscal rules
FILE PHOTO: Italy's Economy and Finance Minister Giovanni Tria speaks to reporters during the G20 Finance Ministers and Central Bank Governors Meeting in Fukuoka, Japan June 9, 2019. Franck Robichon//File Photo   -   Copyright  POOL New(Reuters)
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ROME (Reuters) – Italy wants France and Spain to support its campaign to change the European Union’s fiscal rules and focus them more on growth in the face of a regional and global economic slowdown, Economy Minister Giovanni Tria said in remarks published on Friday.

Italy’s ruling coalition, forged a year ago by the anti-establishment 5 Star Movement and the right-wing League, has always voiced criticism against the so-called EU Fiscal Compact treaty which in 2013 introduced stricter budget rules.

League leader and deputy prime minister Matteo Salvini blames them for impoverishing the country by forcing it to adopt austerity when more expansive fiscal policy is required.

Italy has the euro zone’s second biggest debt burden after Greece, at more than 130% of economic output, and has twice in six months narrowly avoided EU disciplinary action after pursuing budget stimulus, including major new welfare measures.

In an interview with Italian daily La Stampa, Tria said EU states should review their priorities and denied that Italy was isolated in its push for a revision of the rules.

France has not shown much public enthusiasm for Italy’s cause, with Finance Minister Bruno Le Maire saying last month that he hoped Rome would comply with the EU rules.

However, Paris has meanwhile embarked on its own new budget spending and tax cuts, unveiling last year a package worth more than 10 billion euros ($11.3 billion) in response to prolonged street protests.

“Italy is certainly standing next to France and Spain and partially to Germany. There are the prerequisites for changing EU economic policies,” said Tria, a technocrat who is considered a moderate voice inside the government.

“Relaunching a debate over the Fiscal Compact is possible,” he added. “We need to discuss how to change these rules.”

The European Commission pulled back from a debt procedure against Italy last week, a sign of Rome’s willingness to compromise but also of Brussels’ lenient interpretation of EU fiscal rules.

(Reporting by Giselda Vagnoni; Editing by Mark Bendeich)

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