EU working ‘non-stop’ to ensure Italy avoids budget sanctions

EU officials are “working non-stop” to bring an end to the battle over Italy’s controversial budget plan and avoid imposing sanctions.

European economic commissioner Pierre Moscovici told France’s RTL radio he had been working day and night to avoid an unprecedented disciplinary process against Italy.

Moscovici also said that France’s expected overshoot of the EU’s three per cent of GDP deficit was tolerable as a temporary measure and wouldn’t incur fines.

“I’ve been working hard, almost day and night… so that Italy will not be sanctioned either,” Moscovici told France’s RTL radio.

“We are working non-stop as part of a dialogue so that Italy can carry out the policies it wants, while respecting the rules,” he added.

The Italian government revised its draft budget plan earlier this month after it was rejected by the European Commission.

It had initially contained a deficit target of 2.4 per cent for 2019 and a growth forecast of 1.5 per cent, which has now been lowered to one per cent, according to government sources.

Prime Minister Giuseppe Conte said last week the deficit target had been cut to 2.04 per cent and he expected Brussels to be satisfied with the changes.

The EU and Italy have been embroiled in an intense standoff for months over the issue, with Rome initially unwilling to budge on its proposals.

But hopes of a resolution have been boosted in recent days with negotiations being held and both parties confident of a positive outcome.