The rules set in the European Union are there to ensure that all of the separate economies are achieving the same goals and hitting the same targets – no economy is running too fast or too slow. The member states are not supposed to have a deficit above 3% of its GDP. The recent forecast by the European Commission puts Italy above its 3% target in 2020 and now Brussels is starting to turn up the heat on Italy.
The European Commission is the EU executive arm and it is in charge of keeping member states in line with agreed policy. Forecasts for the Italian budget deficit of 2.5% of GDP for this year and 3.5% for 2020 and this is due to a weak labor market and higher public spending by the government. There are now heated discussions between Rome and Brussels – the Commission raised concerns and has not hinted at disciplinary action for Italy in the near future.
The 2020 estimates suggest that Italy will breach the rules next year and that there will likely be questions about the French budget as well as others in the Union at large. The hole in the Italian budget is about 23 billion Euros, or $25.8 billion dollars. And as stated, it is growing.