October 2, 2018 / 11:41 AM / 2 months ago

Italy must observe EU budget rules: Austrian EU presidency

LUXEMBOURG (Reuters) - European Union finance ministers expect Italy to observe EU budget rules in its 2019 budget, Austrian Finance Minister Hartwig Loger whose country holds the rotating EU presidency, told a news conference on Tuesday.

EU budget rules, called the Stability and Growth Pact, say that euro zone governments have to bring their structural budget balance, which excludes one-offs and the effects of business cycles, to balance or surplus.

Italy wants to increase its deficit, even though it has the second highest public debt in the euro zone after Greece in terms of GDP.

Loger said that euro zone ministers were jointly responsible for the financial stability of the single currency area.

“Our expectation is still that if we have rules at the European level, these rules are observed. This is our expectation. The majority of the member states will clearly ask and demand that these rules are observed,” he said.

European Commission Vice President Valdis Dombrovskis, also present, said Italy had the highest debt servicing costs in the European Union and therefore had to have responsible budget policy to be able to carry that burden.

Reporting By Jan Strupczewski

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