EU Says Italy Risks Penalties on Debt, Seeks Explanations

The European Commission confirmed it will take the first step in a disciplinary process that would put Italy at risk of financial penalties, and demanded the government explains its failure to rein in debt before the EU’s executive makes its final decision next week.

In a letter sent to the Italian Finance Minister Giovanni Tria on Wednesday, the commission’s finance chiefs Valdis Dombrovskis and Pierre Moscovici said the country hasn’t “made sufficient progress towards compliance with the debt criterion” of the EU’s fiscal laws. The two officials asked Rome to cite any factors that explain this deterioration by May 31, according to the letter seen by Bloomberg.