Italy: Excess Deficit Procedure Begins

Economics Commissioner Joaquim Almunia presented a report to the Commission in Strasbourg yesterday. (The report is here: pdf). Essentially Almunia argued that Italy’s deficit at 106% of GDP was way above the target 60% set by the new version SGP. He also argued that it was neither temporary, nor the product of exceptional circumstances (the two other criteria). The document will now go the rounds for two weeks of ‘technical consultation’ before a final decision is taken at the next Ecofin meeting.

“The Italian economy minister, Domenico Siniscalco, signalled a fight against the commission, saying he disputed its assessment and would seek support among finance ministers this weekend.”

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".