European Commission Vice-President Valdis Dombrovskis said in an interview with Il Sole 24 Ore that Italy’s 2019 draft budget plan “significantly” deviates from the country’s commitment to the EU. The resubmitted plan kept the highly criticized budget deficit target at 2.4% of GDP and growth forecasts unchanged at 1.5%. Dombrovskis said that is “openly” challenging the budget rules agreed by all Eurozone countries. Also, he said the plan is “counterproductive” as it triggers investor concerns and would push bond yields higher.
Dombrovskis also warned that if Italy no longer comply with the Stability Pact, opening a procedure of penalty “would be justified”.
