Advertisement
Features

Rome plays the long game with Brussels

Italy’s response to pressure from Brussels over its budget may be better orchestrated than it appears.

924-Conte-634
Italy's PM Giuseppe Conte: servant of two masters

The European Commission has found itself shadow boxing with the Italian government as different ministers send mixed messages about the country's budget plans. Brussels has rejected Italian proposals to run a 2.4% budget deficit next year and announced last week that it is considering disciplinary action that opens the way to multibillion-euro fines.

Advertisement - Article continues below

Five-Star leader and deputy prime minister Luigi Di Maio and economy minister Giovanni Tria both indicated this week they are open to tweaking the budget, temporarily calming markets. Yet on Monday the country's prime minister Giuseppe Conte and deputies Di Maio and Matteo Salvini of the League party said that the objectives for the budget had "already been fixed".

In apparent imitation of the Brexit pantomime, Rome has put on its own "surreal piece of theatre ahead of the festivities this year", says Ferdinando Giugliano for Bloomberg.

The theme? A "servant of two masters". PM Conte has been shuffling back and forth between the Commission in Brussels and his populist masters in Rome. Yet the proposed budget is still full of "irresponsible giveaways", such as a lower pensions age, that are not so amusing.

The trouble is that the right-wing Salvini and the left-leaning Di Maio "might be happy to cut the other's preferred promises, but not their own". At least Salvini has struck a more conciliatory tone as he tries to extract concessions from the EU. Perhaps "recent struggles with debt issuance" have "concentrated populist minds".

Italy's response to pressure from Brussels and the markets may be better orchestrated than it appears. Talk of compromise might be a "ploy" to keep the spotlight off Italy's sovereign debt, CMC Markets analyst David Madden told City AM. Di Maio and Salvini may be playing a long game, distracting investors with conciliatory words while working to pass the budget in parliament.

Advertisement
Advertisement

Recommended

How long can the good times roll?
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
The eurozone takes a big step forward towards fiscal union
EU Economy

The eurozone takes a big step forward towards fiscal union

The European Union’s coronavirus recovery plan and its decision to issue joint debt will change the bloc forever.
23 Jul 2020
Here’s the one simple reason the EU deal matters for investors
EU Economy

Here’s the one simple reason the EU deal matters for investors

The EU has agreed a deal to bail out the countries worst-hit by coronavirus. It's not the best deal on earth, but it is a very important one for inves…
21 Jul 2020
How to have a low-tax retirement in the sun
Pensions

How to have a low-tax retirement in the sun

Greece is to offer a ten-year tax incentive to foreign pensioners. That’s a pretty good offer, says Merryn Somerset Webb. But it might not last.
20 Jul 2020

Most Popular

Eagle Lightweight GT: the reincarnation of the E-type Jag
Toys and gadgets

Eagle Lightweight GT: the reincarnation of the E-type Jag

Jaguar’s classic E-type sports car has been reinvented for the modern age. The result – the Eagle Lightweight GT – is a thing of beauty.
7 Aug 2020
Platinum: the precious metal that looks set to play catch-up with silver and gold
Silver and other precious metals

Platinum: the precious metal that looks set to play catch-up with silver and gold

Gold and silver continue to soar, but there's still time to get in. And there's another precious metal that looks set to go on a bull run too, says Jo…
7 Aug 2020
UK house prices hit a new record high – can it last?
House prices

UK house prices hit a new record high – can it last?

Despite the pandemic, UK house prices have hit a new high. John Stepek looks at what’s driving the surge in prices, and what it means for house prices…
7 Aug 2020