Editorial Board
European Commission Right to Demand Italy Budget Changes
The euro area needs budget rules, and the European Commission is right to enforce them.
Not backing down.
Photographer: Alessia Pierdomenico/BloombergThe European Commission has rejected Italy’s budget for flouting Europe’s fiscal rules, and has given Rome three weeks to try again. It’s the first time this has been done, and the move is risky because it sets up a political confrontation that could end badly. But the rules are there for a reason, and if the system is to work, Italy can’t be allowed to opt out.
The Italian government unveiled plans recently to lift its budget deficit to 2.4 percent of gross domestic product next year. Brussels wants the cyclically adjusted balance to improve by 0.6 percentage points of GDP; Rome chose to worsen it by 0.8 percentage points.