{"id":7258,"date":"2018-12-03T08:00:01","date_gmt":"2018-12-03T13:00:01","guid":{"rendered":"http:\/\/thediplomaticenvoy.com\/?p=7258"},"modified":"2018-12-06T11:09:11","modified_gmt":"2018-12-06T16:09:11","slug":"italy-sticks-to-eu-budget-plan-despite-growing-concerns","status":"publish","type":"post","link":"https:\/\/blogs.shu.edu\/thediplomaticenvoy\/2018\/12\/03\/italy-sticks-to-eu-budget-plan-despite-growing-concerns\/","title":{"rendered":"Italy Sticks to EU Budget Plan Despite Growing Concerns"},"content":{"rendered":"

By Saveria Antonacci<\/strong>
\nStaff Writer<\/strong><\/p>\n

The European Commission has overwhelmingly rejected Italy\u2019s bold financial demands for their 2019 Budget. Prime Minister Giuseppe Conte is heading the budget talks in conjunction with his deputies, Matteo Salvini, and Luigi Di Maio, in an effort to fix Italy\u2019s economic situation, as it has been on a slow decline.<\/p>\n

The reason for the EU\u2019s concern is that while Italy is the third-largest economy in the Eurozone with a Gross Domestic Product of over two trillion euro, it also has a large amount of debt. As a result, Rome demands lofty amounts of money for government spending in relation to the country\u2019s debt, which trails after Greece for the second highest debt rate in the European Union, according to BCC<\/a>. At this rate, Italy\u2019s proposal would lead to a triple in the planned deficit. Eurozone rules say that countries should keep their deficit to less than 3 percent of GDP, which Italy plans to do with a deficit of 2.4 percent.\u00a0 However, \u00a0Rome would also like to defy the EU and raise the national debt to over 60 percent of GDP. If Italy does not back down from some of its demands, the country risks fines of up to .5 percent of total GDP.<\/p>\n

In addition to asking for assistance from the EU, the Italian government has requested that its citizens buy bonds with returns that are higher than inflation rates, according to CNN<\/a>. Italian citizens that agree to this would also receive tax breaks. This plan would help the government finance spending plans that have been rejected by the EU for violating laws on public debt. The downside is that households would be increasingly susceptible to negative market activity in the financial sector. It should be noted that Italian tax payers currently spend as much servicing the national debt as they do on education. This could be a deterrent from assisting the government further, reports BBC<\/a> \u00a0from an additional source.<\/p>\n

Within the last few years, Italy\u2019s government has taken a populist turn in leadership. According to Bloomberg<\/a>, the Far-right League\u2019s main goals include pension reform, a crackdown on crime, and the restriction of migrants arriving at Italian ports. The anti-establishment Five Star Movement, famously co-founded by Italian comedian and political satirist Beppe Grillo, aims to promote honesty and direct-democracy in government. Both parties were able to come to power by vowing to end poverty with a universal basic income, additional tax cuts, and by scrapping extensions to the retirement age, which currently resides at 66 for men and 65 for women.<\/p>\n

Italy is facing other domestic issues that have affected their economy. On top of an aging population, Italian youth have been the center of the most-recent European \u201cBrain Drain.\u201d This is a phenomenon in which many young educated Italians leave the country for other European cities, in search of better opportunities, according to La Stampa<\/a>. The most common resettling locations include towns in Germany and England.<\/p>\n

Despite its debt, Italy is the third largest economy in the Eurozone, the monetary union that utilizes the Euro as a central form of currency. The country\u2019s largest industries include tourism, machinery, iron and steel, chemicals, food processing, textiles, motor vehicles, clothing, footwear, and ceramics, as per Economy Watch<\/a>. Economic growth is also hampered by industries in the south that are not experiencing the same amount of growth as those in the north.<\/p>\n

The final decision over Italy\u2019s budget is still uncertain. When the European Commission first rejected the draft budgetary plan and gave Italy an extension to revise it, the populist leadership reacted poorly to change. Deputy PM Matteo Salvini stated \u201cWe won\u2019t subtract one single euro from the budget,\u201d according to The Guardian<\/a>. Despite uncertainty over who will budge and give into each other\u2019s demands, PM Giuseppe Conte believes that time will prove the plan is \u201cexcellent [and]in the interests of both Italy and Europe.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Prime Minister Giuseppe Conte of Italy is heading the budget talks in conjunction with his deputies, Matteo Salvini, and Luigi Di Maio, in an effort to fix Italy\u2019s economic situation, as it has been on a slow decline.<\/p>\n","protected":false},"author":3454,"featured_media":7272,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"colormag_page_container_layout":"default_layout","colormag_page_sidebar_layout":"default_layout","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[382,1258,387],"tags":[426,538,1556],"class_list":["post-7258","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-international-news","category-1258","category-europe","tag-un","tag-italy","tag-budget"],"yoast_head":"\nItaly Sticks to EU Budget Plan Despite Growing Concerns - The Diplomatic Envoy<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/blogs.shu.edu\/thediplomaticenvoy\/2018\/12\/03\/italy-sticks-to-eu-budget-plan-despite-growing-concerns\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Italy Sticks to EU Budget Plan Despite Growing Concerns - 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