Italy Locked in Collision Course with the European Commission, ECB

euro, cc Flickr David Stanley, modified,


The emergence of the Italian government’s first budget plan has been well covered on The drafting process has pitted good politics against sound fiscal policy. In the beginning, it looked like the economic line represented by Finance Minister Giovanni Tria was going to prevail in coalition negotiations. But politics ultimately carried the day.

The coalition announced an expansionary spending plan that delivered on many of its expensive campaign promises, and in doing so flouted EU budgetary rules. Now the European Commission appears poised to take the step of rejecting Italy’s budget, setting the stage for an unprecedented showdown between Rome and Brussels.

This is a fight the Italian coalition believes it can win, and here’s why:

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