The
European Commission, an organ of the European Union, rejected Italy ’s 2019
budget earlier this week because of the populist Italian Government’s
unprecedented breach of EU rules, as the deficit would be 2.4% of the projected
gross domestic product. The rejection
was unprecedented in EU history.
The Italian Government, which
opposes austerity and claims to favor economic growth, proposed a budget that
exceeds the 2% rule by tens of billions of dollars because it increases welfare
spending, undoes pension reform, awards victims of bank fraud and implements a
flat tax for businesses. It refuses to
eliminate these items from its budget. Italy
had already been granted some flexibility for pro-growth policies. The Commission also found the budget’s growth
estimates too optimistic. The EU and the
International Monetary Fund had been critical of the Italian budget. The Commission is giving Italy three
weeks to modify its budget. The
Government will have no choice but to cut other spending, as it does not intend
to leave the EU or to abandon its single currency. However, the far-right anti-migrant and
anti-European League Party leader, who is Deputy Prime Minister and Interior
Minister, is opposed to making any changes to the budget.
The German Government announced earlier
this week that it will begin to import American natural gas, which will make it
less dependent on the Russian
Federation for fuel. Russia ’s authoritarian and
kleptocratic leader, Vladimir Putin, uses natural gas exports as leverage over
European states.
Five months
after parliamentary elections, Iraq
has a new Prime Minister after the Parliament approved most of his Cabinet
yesterday in another peaceful transition of power.
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