Italy. Report prepared in accordance with Article 126(3) of the Treaty on the Functioning of the European Union

Author (Corporate)
Series Details COM (2019) 532
Publication Date 05/06/2019
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The European Commission published in June 2019 a Report under Article 126(3) of the Treaty on the Functioning of the EU (TFEU), in which it reviews compliance by Italy with the deficit and criteria of the Treaty.

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Article 126 of the Treaty on the Functioning of the European Union (TFEU) lays down the excessive deficit procedure (EDP). Article 126(3) TFEU provides that, if a Member State does not fulfil the requirements in specified criteria, the European Commission is requested to prepare a report. This report - which represents the first step in the EDP - analyses Italy's compliance with the debt criterion of the Treaty in 2018, with due regard to the economic background and other relevant factors.

The document follows a number of other reports in 2018 which highlighted the risk of significant deviation from the adjustment path towards the medium-term budgetary objective. The concerns were addressed by the Italian authorities by amending its budgetary plans for 2019. However, data provided by the Spring 2019 economic forecast showed Italy's non-compliance with the debt reduction benchmark in 2018.

This report was published as part of the 2019 European Semester Spring Package.

The Council of the Europena Union's Economic and Financial Committee endorsed on 11 June the Commission's understanding that disciplinary procedure for excessive deficit against Italy was warranted. The Eurogroup held a discussion on the Italian situation on 13 June.

On 2 July, the Italian authorities informed the European Union of a number of additional measures aimed at addressing the concerns put forward by the European Commission.

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Commentary and Analysis
Deutsche Welle, 05/06/2019: The fine art of defusing Italy's budget row
Bloomberg, 05/06/2019: There's Only One Way to Fix Italy's Mess
Euro|topics, June 2019: Deficit: can Brussels bring Italy to heel?
Bloomberg, 12/06/2019: Italy and EU Can’t Agree on Country’s Structural Deficit
Open Europe: Blog, 06/06/2019: Is Italy heading towards a debt crisis?

Politico, 05/06/2019: Brussels puts Italy on notice for breaching EU spending rules
The Guardian, 05/06/2019: EU could fine Italy £3bn for breaking spending and borrowing rules
Euronews, 05/06/2019: 'My door is open' EU Commissioner tells Italy over debt
RFI, 05/06/2019: EU recommends disciplinary action against Italy over debt
Reuters, 05/06/2019: Brussels targets Italy over rising debt, reviving dispute
The Local (Italy), 05/06/2019: EU puts Italy on notice over spend-happy budget
The New York Times, 05/06/2019: European Union Warns Italy to Reduce Spending and Borrowing
EurActiv, 06/06/2019: Italy’s Di Maio, Salvini slam EU debt warning
BBC News, 06/06/2019: Italy risks disciplinary action for violating EU debt rules
Deutsche Welle, 11/06/2019: Juncker criticizes Italy's excessive deficit as EU penalties loom
The Local (Italy), 11/06/2019: Italy 'absolutely determined' to avoid EU sanctions over debt: PM
Reuters, 11/06/2019: EU moves closer to debt action as Italy angles for compromise
Bloomberg, 11/06/2019: Italy’s Government Seeks to Avoid ‘Jittery’ EU Procedure
Reuters, 13/06/2019: Italy to seek deal with EU over public finances: finance minister
Reuters, 13/06/2019: EU steps up pressure over Italy debt, flags stability concerns
EurActiv, 14/06/2019: Finance ministers press Italy to stick to EU fiscal rules
Bloomberg, 14/06/2019: Italy Has Days to Avoid EU Action as Ministers Show Urgency
Reuters, 14/06/2019: EU heads towards full-blown fight with Italy over debt

European Commission: Letter from Italian authorities to the European Union, 2 July 2019

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