The Eurogroup, seamless front to Italy

Brussels tomb Budgets Italian

The Eurozone's growth rate lowest since 2014

The mule of the Government of Italy threat to the vulnerable european economy

The Eurogroup closes ranks. The Economy and Finance ministers of the Eurozone called for this Monday in Brussels the Italian Government to "participate in an open and constructive dialogue with the European Commission" to the "preparation of a budget plan revised in line with the Stability and Growth Pact.

there was No blood, cruelty or large shocks. The minister Giovanni Tria, a spokesman in spite of all the occurrences and positions of Matteo Salvini and Luigi Di Maio, went to the Eurogroup constructively, without raising your voice and making your computer stand out, time and time again that they were seeking a "commitment" and did jig-a important message: "we don't want to break Europe or the rules."

The ministers, waiting for Rome to communicate the next day 13 of your expected reply, not looking for a fight, but it does send a message sufficiently resounding. Taking care of the words and the tone, but without ambiguity with the ideas. After six hours of meeting, it was agreed a terse press release that starts with the main idea: "we agree with the Commission".

The Eurogroup is seamless, as in 2015, with Greece. Believes that the draft budget Italian does not conform to the rules, and must be modified. But above all, it deplores the attitude, the cockiness and the aggressiveness that I have come this year from the Government for Giuseppe Conte. It is one thing to break the rules, as they have done consistently the countries in recent years. Another, boasting, teasing, and say that there will be no amendments. "We recall the importance of sound public finances and its coordination in the framework of the Stability and Growth Pact as a prerequisite for a durable economic growth and sustainable and a good functioning of the Economic and Monetary Union. The focus on reducing enough of the debt and the way to achieve the Budgetary Objective in the Medium Term are an integral part of the Stability Pact," the statement said, with a language that is much more technical than political.

"it Has been a dialogue was very constructive. The minister Tria had the opportunity to explain the strategy of his Government in the Budget. We are in the process of sending a revised version. We have heard the views of various ministers, but this was not the time for a final view, Italy has a week more," said the Portuguese Mario Rye.

In recent weeks, Rome has been playing his position. Despite the rhetoric, the speeches, the posturing, his strategy has focused. To claim that there will be three years in a row with a deficit to 2.4% (agreed this year was a 0.8) has been passed to think almost exclusively in 2019. They want an exemption, you will look for the other side, the only that exercise. To be able to sell a victory, a bet on the growth after decades of stagnation.

The EU can't buy something as well. "We are not a federation, but we have rules and shared sovereignty, shared", he warned after the meeting Klaus Regling, head of the Esm. But if you really are looking for commitment and no room for turning back, it is always possible to find formulas. Countries such as Spain or Portugal have not made the required efforts to reduce the deficit or growing at 3%. We followed the protocols, they were put to test all the rules. There was fine, but quickly cancelled. Astonishment, but not cost. And it is not ruled out that the Italian case, in a good scenario, to end up in a similar way.

The play of Tria, according to sources in italy, passes by the scraping of all the possible places, appeal to the "relevant factors", in search of the flexibility. "I expect the risk premium to drop when our strategy is understood better, when we explain better our numbers," said Tria to the output.

Margins has always been. The Commission has already granted in recent years, up to 30,000 million in flexibility, the equivalent to 1.8% of GDP. But you can not stretch the hand always and can't justify a detour as the claimant stubbornly Rome.

Another possibility would be to assume the process of sanctions and, presumably, in the last instance, a fine. According to the Excessive Deficit Procedure could be 0.2% of the GDP, which in the Italian case would be around 3,400 million euros. An amount significantly lower than the diversion of 1.6% of GDP to which it aspires. Salvini and Di Maio have been assured that this Commission Juncker, the next year depletes mandate, will not come to apply the punishment. "I do not believe that sanctions are the best solution, I've never believed in the punishment," said last night, Pierre Moscovici, one of the ones made in 2016 for that in fact Spain did not have fine.

The response Italian is expected on November 13 as a maximum. And the Commission will issue its verdict on this the 21st day. "We have asked for a revised version and we expect a revised version", it warned Moscovici. Before, this same Thursday, the Macroeconomic Forecasts of Autumn, one of the most important events always on the calendar community. And in which you will see if Brussels downgrading even more the country's growth or worsens the imbalances.

The Eurogroup will return to see the faces, as confirmed by its president Mario Rye, on the 19th, too soon. It is, in addition, a Eurogroup extraordinary, thought to concrete progress in the reform of the Economic And Monetary Union, and in particular in aspects of the Banking Union and the Esm, the european fund for bailouts. The budgets are not on the agenda so although it's quite possible that you touch the topic, there may not be a specific decision of the ministers until the beginning of December.

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