If you read this column in printed print or online just one day after the release, you may already know how badly the makers are European Union decisions oppose Italy due to its continuation; Budget that the European Commission – in its first decision in history – is rejected as it is not consistent with the "rules".
Why could it be? From the European Commission, with this decision, not only named "taken on Wednesday", it seems that you have a lot of thinking, because it is aware it is on a very slippery ground.
Initially, the Commissioner is responsible for economic and financial matters Pierre Moscovici In the meantime, its breakup of features to & # 39; Statistical and Fàs Agreement, the State Agreement and Fàs have kept track of the site once and twice, but have also supported them in their country's handling in France, from March 2015 he praised let them take two more years to go to; opposing the provision that restricted government deficit up to three percent of GDP, and confirmed to European decision makers that the proposal was reinforced and even "welcome" .
Over recent years, it has often appeared, in a situation where a member has been placed on the outskirts of European officials' demands, international financial markets came to help; in Italy, they have already done this between July and November 2011, when Prime Minister Berlusconi then quickly removed the annual output required by Italian bonds from just under five to more than seven per cent and retire. But this time the markets are not as co-operative.
In the second place, if we need to be lost for a moment compared to France and the campaign against Italy, it is true that it has been done. First place in March 2015 and the second is in November 2018. But it is also true that France opposed the direct budgetary deficit rules in 2015 up to 3.6 per cent of GDP, and 3.5 per cent of GDP in 2016, while Italy is now indirectly, as it is express a deficit of 2.4% of GDP, which is within the permitted limit, but the European Commission wants to reduce the deficit to 0, 8 per cent of GDP, as a public debt, is 132 per cent of GDP, higher than 60% of GDP boundary. But France is also overlooking the & # 39; This is a very serious border, and at the time of a breakdown, from the past three years there is almost 100 percent of public GDP debt and Italy at the time that France Expressively emphasize the restriction of the deficiency, as it is missing up to 2.6 per cent of GDP in 2015 and 2.5 per cent of GDP in 2016.
Third, if we are now focusing on the difference between the limitation of the deficit and the restriction of public debt, it is clear that Italy does not; Breaking the first one because it's 2.4 but less than three. If the European Commission agrees, however, that Italy will be controlled, it would be formalized, as said by a Economist, by describing the It is a very high public debt, because the same is the same thing as it is. Breach of the rules directly, although the budget deficit at least a barrier is a break. This "logic" was already marked by its commission in a budget refusal note, saying:
»The ratio between public debt and Italian GDP, which was 131.2% by the end of 2017, is the second largest in the EU and one of the largest in the world. It means an average burden of 37,000 barley per head. The cost of a debt service requires a higher proportion of public funds in Italy than elsewhere in the euro area, which adversely affects productive expenditure. (…) This also sets out the compliance of Italy with the public debt reduction targets taken in each Member State in the EU, Permanent reduction in debt levels requires 60% of GDP as set by EU regulations.««
But there would be a strong and clear difference in such a way, because the commission itself recognizes that Italy's second debt is the second largest in the European Union, and Greece, which Public debt is up to 180 per cent of GDP and so it is definitely a & # 39; Breach of the only rule, which has yet to be permissible and in particular this rule has been broken by more than half the euro, and Belgium (106 per cent of GDP), France (99), Austria (77), Slovenia (73), Ireland (69) and Germany (62)).
Fourth, though its & # 39; commissioned, in a non-compliance case set up by the bankruptcy, imposed a tax on the state for the offender in the level of (up to) 0.2 per cent of GDP, which would amount (up to) 3.5 billion euros in the Italian case, it would be it is very poor, as a country that has too many debts and deficiencies, the payment of this penalty will increase both debt and need; The Italian Prime Minister, Salvinie, has already announced that the government would abandon such a "crazy" mentality and that 60 million Italians would rise up against them. There is a different option to the commission as a contract to reserve money from the EU budget sought for Italy, but this would also be the case. oppose Italy, to confirm to & # 39; consolidate the deficit with the essential investments in infrastructure reconstruction, and in particular the money spent on the EU budget for infrastructure projects.
Over the last eight years, it was often a & # 39; seeing that, in a situation where a member was placed on the outskirts of European officials' demands, international financial markets came to rescue: government bonds of "non-material" members seeking ideas higher than bust; a loan in such results is clearly unstable, but the ball has all the names put by the officers at the time they ask it. In Greece, b & # 39; We can look into this wavelengths for seven years, and in Italy they have already done this between July and November 2011, when the annual results have grown from just under five with more than seven percent, and then Prime Minister Berlusconi retires to & # 39; removing "European" requirements, and the essential results began to decline on the same day. These experiences are encouraged by the rejection that even this time, the European Commission can report "additional player", whose first economist has a " German Tuesday Jörg Krämer it is on the sides Mobile site who specifically asked for markets "to punish Italian people and to surrender them in a budget dispute with Brussels."
But this time the markets are not as co-operative. At the current levels, the annual output of the Italian tenancy government bonds is higher at the current 3.6 percent post 2014, but has not blocked the dispute over the next few months After being able to move it with more than a few decades of percentage point. This move is back in the last three months, that is, from August 21 to yesterday, I showed it in the album, and the negative events occurred on 23 October (when who rejected the budget for its budget) and on November 13 (when Russia refused to request its commission reduce budget spending). Even in the last hours before the critical day, when we get out, or – and how this debate will increase further, nothing has happened. This means, even after the month of the shades in the & # 39; Italian new budget, most investors do not yet have a & # 39; see falling on the edge of stability; in fact, they still do not even know the answer to the question of how strong European officials are ready to make the dispute more closely with Italy.
The following question can be extended to: Who will enter into Italy, the EU or the first merchandise? The answer may not have to wait long.