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EU concerned by Italy’s budget deficits for next three years

BRUSSELS (Reuters) – The European Commission is concerned about the budget deficits planned by Italy for the next three years which it said contravene what European Union finance ministers asked Rome to do in July.

In a letter to Italy’s Economy Minister Giovanni Tria the Commission said that with a planned headline deficit of 2.4 percent of GDP in 2019, Italy’s structural deficit, which excludes one-offs and business cycle effects, would rise by 0.8 percent of GDP.

The council of EU ministers, however, asked Italy in July to reduce that structural deficit by 0.6 percent of GDP next year, which means the deficit would be 1.4 points off track.

Italy is planning to bring down the headline deficit to 2.1 percent in 2020 and to 1.8 percent in 2021, but that would not be enough either, the Commission letter said, because it would mean Italy’s structural deficit would not change in 2020-21.

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