October 3, 2018 / 11:11 AM / 2 months ago

EU executive to assess Italy's fiscal plans only against 2019 targets

BRUSSELS (Reuters) - The European Commission will assess Italy’s compliance with fiscal rules only against the country’s targets for next year, three EU officials said on Wednesday.

The clarification comes after the Italian government said earlier on Wednesday it could reduce its deficit targets from 2020 after plans announced last week caused market turmoil.

In the next assessment of Italy’s compliance with fiscal rules, the Commission will take into account data for 2018 and targets for next year, the officials said.

“Targets for 2020 and 2021 are not part of our assessment,” one official said in answer to a question on Italy’s plans to revise down its deficit targets from 2020.

A spokesman for the Commission said Italy’s budget for next year will be assessed when it is submitted by mid-October.

He added that, in that assessment, the Commission “will take into account the upcoming autumn forecasts”, which will provide an outlook by the Commission of EU countries’ growth, debt and deficit trends for the 2018-2020 period.

The Commission said earlier this week that Rome’s planned budget deficit of 2.4 percent of GDP in 2019, 2020 and 2021 was likely to break EU budget rules, because it would mean Italy would not be cutting its structural deficit or huge public debt.

Rome responded on Wednesday by saying it would keep the deficit in 2019 at 2.4 percent of GDP but could agree to reduce the shortfall in 2020 and 2021.

Reporting by Francesco Guarascio and Jan Strupczewski; editing by Philip Blenkinsop

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