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While the economic controversy has lasted a little over a month between Brussels and Rome, the economic reality has changed dramatically to the detriment of Italy. The situation is considerably aggravated by the slowdown in the Italian economy.
The government's budget plans have been too optimistic. Italy had a growth rate of 1.5% for next year – already among the lowest in the EU. The compilation done in Brussels shows that growth for 2019 and 2020 should not exceed 1%.
"This is another negative news for the government.It is now clear that the situation is much worse than we thought," said Francesco Lippi, professor of macroeconomics at LUISS University in Rome.
The Italian economist Giovanni Tria was initially negatively adjusted to a financial plan that allowed the budget deficit to rise to 2.4% of GDP. Two months ago, according to rumor, Minister Tria, politically without a party, resigned after that decision. Today, he is ready to redo the budget. But he receives an absolute no from the head of the Italian populist government: Luigi di Maio, five stars, and Legas Matteo Salvini. Making the budget unthinkable rings their message.
In the budget, major reforms are under way: citizen remuneration, uniform taxation and better pension conditions, entailing huge costs.
– None of this will be realized. Once the giant interest rates on the public debt have been paid, there will certainly be no money left for these reforms, "said Mario Calabresi, editor of the large Roman newspaper La Repubblica, which does not strengthen government groups, in DN.
November 21st What is the deadline that the European Commission has given Italy, it is likely that Brussels will find that a Member State for the first time drastically breaks the rules of economic policy. Salvini and Di Maio have not heard what the head of the European Central Bank, compatriot Mario Draghi, said in a statement: "High public debt and low growth require a higher level of accountability".
If no correction is made by the budget, Italy will eventually have to pay long-term penalties. According to an economic estimate, the newspaper La Repubblica announced savings needed in 2019 of about 200 billion crowns.
Italy, which has suffered from a series of climatic disasters making more than 30 deaths in recent weeks, could be forced to prioritize its spending. Bridges are being destroyed, millions of trees have been torn down and storms have devoured many of the country's most beautiful coastal stripes. It's an additional $ 30 billion to $ 40 billion.
The election of the next year in the European Parliament May 23-26 will be of utmost importance. Legas Matteo Salvini is already preparing an aggressive election campaign.
"Mostly Lega, but also the Five Stars, see it as a political opportunity to win votes.They are looking for a scapegoat because the economy is going very badly.The answer is, of course, that it is the fault of the European Commission, says Professor Francesco Lippi in DN.
He adds that he is worried for the future of the EU. In the long run, this could be a tragic economic tragedy not only for Italy but for many other countries in the euro area.
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