June 5, 2019 / 12:55 PM / 21 days ago

Germany's Scholz: EU's rules-based approach, good talks right way to deal with Italy

FILE PHOTO: German Chancellor Angela Merkel and Finance Minister Olaf Scholz attend the cabinet meeting in Berlin, Germany May 29, 2019. REUTERS/Fabrizio Bensch

BERLIN (Reuters) - German Finance Minister Olaf Scholz told Reuters on Wednesday that the European Commission’s double strategy of insisting on adherence to the euro zone’s budget rules while remaining open for constructive talks was the right way to deal with Italy.

The European Commission concluded on Wednesday that Italy is in breach of EU fiscal rules because of its growing debt, a situation that justifies the launch of a disciplinary procedure.

“We showed last year that the European Commission’s well planned and rules-based approach as well as orderly and good talks between the EU and Italy were the right way to go,” Scholz said in an interview. “And that will be the case again this time.”

Asked whether he shared concerns voiced by the International Monetary Fund that Italy’s debt poses a major risk to the euro zone economy, Scholz said that the single currency bloc was stable.

Scholz said that the euro zone had learnt the right lessons from the financial crisis 2008 and created new institutions to deal with debt problems.

He added that one of those lessons is that struggling euro zone banks now must deal with their problems themselves, rather than taxpayers bailing them out.

Reporting by Michael Nienaber; Editing by Paul Carrel

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