(by Franco Bechis) – Italy is officially in trouble, because yesterday the European Commission started the procedure for excessive debt. He did this by writing a report 21 pages, which contains a surprise: the formal basis of the dispute has little or nothing to do with the maneuver of the government led by Giuseppe Conte, because it is relative to the result of the public debt over the years 2016 e 2017. So it was Matteo Renzi and Paolo Gentiloni who got Italy into trouble. The infringement procedure is the Democratic Party's last wonderful gift to Italians.
Here is the key passage from that document: “Based on reported data and autumn forecasts 2018 of the Commission, Italy did not respect the debt reduction parameter in 2016 (gap del 5,2% of GDP) or in 2017 (gap del 6,6% of GDP)”. And again: “overall, Italy's lack of compliance with the debt reduction benchmark in 2017 provides evidence of the prima facie existence of an excessive deficit within the meaning of the Stability and Growth Pact, considering all the factors as set out below. Furthermore, based on government plans and autumn forecasts 2018 of the Commission, Italy should not meet the debt reduction benchmark in 2018 or in 2019”.

The words are clear, even if what happened yesterday is rather vague and difficult to explain without resorting to the gargles of Eurobureaucracy. It is a fact that Italy does not get along very well with the current command group in Brussels., and it is true that not much diplomacy was used to avoid the clash. Faced with the rejection that had already been predicted for days in the commission circles, however, I wondered: how do they open a procedure for Italy to have broken through the deficit/GDP ratio beyond 3% if the budget maneuver for the 2019 provides a report of 2,4% therefore well below that threshold? The answer from the guessers was this: It's true that Italy hasn't broken through 3% but the procedure for excessive deficit in the euro area legislation can also be contested against countries that do not respect the debt rule, which could not exceed the 60% of GDP. And this is the choice, but it's a bit like having discovered hot water: since the euro existed, Italy has never been in compliance with its debt, always well above the 100% of GDP. After having turned a blind eye for twenty years it seems curious that the EU commission is only opening both now. And it's also a bit risky, because according to the forecast for the 2019 the average debt of euro area countries will be equal to 85% of their GDP. Seven countries (in addition to Italy also Greece, France, Spain, Portugal, Belgium and Cyprus) they have and will have the debt above the 100% of their GDP, and others 3 between 60 and the 90% of their GDP: ten countries would therefore violate the rule, and only Italy would be punished. To give that slap, however, it was necessary to rely on concrete facts and not just future predictions. This is why the EU dispute is based on Italy's robust and safe deviation from the debt rule for two consecutive years: il 2016 and the 2017, adding that according to forecasts the debt repayment will be zero or in any case much lower than what was expected both in 2018 that in 2019, for which, however, there are no certain data yet. The various Renzis therefore have little to tear their clothes and make poignant appeals to the conscience of Conte or Matteo Salvini and Luigi Di Maio, Gentiloni and Piercarlo Padoan: because they were the ones who created the damage that the EU accuses us of...
SOURCE: https://infosannio.wordpress.com/2018/11/21/franco-bechis-renzi-e-gentiloni-hanno-messo-nei-guai-litalia/