Comments by EU's economic and monetary commissioner Pierre Moscivici
- EU forecast on Italy is made based on October's budget proposal
- Growth projections differ as EU forecasts are more conservative
- Situation may look different depending on what Italy responds with next week
- There is no future for Italy outside the Eurozone
- Confrontation is never the right approach
- Doesn't see how it's possible to "split down the middle" on budget
- Rules have to be respected and procedures have to be adhered to
The commission earlier released their latest economic projections and sees Italy's growth being a measly 1.2% in 2019 while seeing that Italy will exceed the deficit limit of 3% by 2020. Moscovici's words here is basically calling for Italy's government to scrap all of their election campaign promises to adhere with the rules but I just don't see how the Italian government will cave on that front.
We're most likely headed for a collision course here as Italy will likely respond with the same growth projections but possibly lowering the deficit a little. But according to the commission, those growth projections won't hold up and Italy needs to shave off at least about 1.0% of the deficit to make things work - something which is almost impossible to happen.
This will be an outside risk factor that could weigh on the euro come next week.
