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EU Warned: Budget Clash with Italy ‘to Get WORSE’ as Eurosceptic Leaders Refuse to Budge

  • EU Warned: Budget Clash with Italy ‘to Get WORSE’ as Eurosceptic Leaders Refuse to Budge
    THE European Union is on track to face additional headaches as Italian leaders refuse to budge on their proposed budget plan for 2019. Goldman Sachs has warned Brussels the clash with Rome could “get worse” as the deadline for a new proposal looms.

    Top Eurocrats have been engaged in a raging battle of wills with Italian eurosceptic leaders Matteo Salvini and Luigi di Maio after European Commissioner Pierre Moscovici rejected the budget proposal.

    Italy has insisted it needs to increase its deficit to 2.4 percent, which breaks EU fiscal rules that are designed to protect the Eurozone, and was given a three-week ultimatum to produce a new proposal for its 2019 budget or face fines of up to €3 million.

    But Goldman Sachs economist Jari Stehn has warned the European Union could face more struggle as both Mr Salvini and Mr di Maio refuse to change their course of actions.

    Speaking to CNBC, Mr Stehn said: “We ultimately think things might have to get worse before they can get better, in terms of market pressure. “In the short term, tensions are quite elevated so we think that in their response next week the Italian authorities are probably not going to back away from their plan to increase the deficit. We’ll have to see what happens from there.”

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November 8, 2018 - Posted by | Economics, GeoPolitics | , , , ,

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