The Intelligence from The Economist Basta! The EU challenges Italy’s finances
Jun 6, 2019
Madeline Johan, The Economist's Canadian correspondent, sheds light on pressing international issues. She discusses Europe's stern warning to Italy about its soaring debt, and the implications of political strife between populism and financial responsibility. Shifting gears, Johan examines Canada’s evolving refugee policies amid rising political tensions on immigration as an election looms. Finally, she delves into the detrimental culture of presenteeism in workplaces, advocating for a shift towards prioritizing employee well-being.
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Italy vs. EU
- The European Commission might sue Italy for violating debt and deficit rules.
- Italy's coalition government leader, Matteo Salvini, responded angrily, demanding dignity and work rights, not money.
Italy's Debt Burden
- Italy's public debt, the second largest in Europe after Greece, is around 130% of its GDP.
- This debt burden is increasing, violating EU fiscal rules which require it to decrease.
Italy's Proposed Solution
- Italy's finance ministry claims they'll control the deficit by raising VAT or finding alternative funds.
- However, Brussels remains skeptical, given other politicians' opposition to VAT increases and Salvini's talk of rewriting fiscal rules.