Italy Postpones Its Day of Reckoning
A showdown with the EU over its budget plans has been avoided. But another political battle is coming.
The eternal crisis.
Photographer: Alessia Pierdomenico/Bloomberg
The Italian government has struck a deal with the European Commission over its spending plans for 2019. The agreement has won Rome a reprieve from the threat of sanctions and gave investors some festive cheer. But the accord won’t solve Italy’s deeper budgetary malaise, and may create additional political tensions.
Italy’s government has revised down its unrealistic growth forecasts and deficit target for 2019. The economy is now forecast to expand by 1 percent next year (instead of an overly optimistic 1.5 percent). Borrowing is expected to reach 2 percent of national income, instead of 2.4 percent.