Reuters quoted La Repubblica as saying that the European Commission said in a letter that Italy lacks prudent fiscal policy, which may impact the country’s market confidence and will start a disciplinary procedure against Italy on Wednesday (5th).
The Republic newspaper pointed out that the report quoted a draft from the European Commission’s letter to be sent to Italy. The newspaper said the European Commission asked Italy to cut its budget by 3 to 4 billion euros (about 26.5 billion to 35.3 billion Hong Kong dollars) to avoid EU sanctions.
Italy in 2018 avoided the crisis of the European Commission to initiate disciplinary procedures. In November 2018, the EU rejected Italy’s 2019 budget and believed that the budget could not reduce Italy’s huge debts. The two sides once fell into a dispute. In December 2018, Italy reached an agreement with the European Union to agree to reduce the fiscal deficit rate from 20% to 2.04% in 2019. However, the Italian League Party proposed a huge 2020 budget. The coalition party insists that Italy and the EU need to adopt a tough attitude when negotiating on the budget.