Italy could veto deal on EU stability pact rules - Meloni

EU chief Ursula von der Leyen and Italian PM Giorgia Meloni visit Lampedusa

European Commission President Ursula von der Leyen and Italian Prime Minister Giorgia Meloni attend a press conference at the airport after a visit to the hotspot, a reception centre for migrants, and later the port where they arrive, in Lampedusa, Italy, September 17, 2023. REUTERS/Yara Nardi/File Photo

Source: X06600

By Angelo Amante and Giuseppe Fonte

Italy could use its veto to prevent the adoption of the European Union's new fiscal rules if the outcome of negotiations among partners does not meet its demands, Prime Minister Giorgia Meloni said on Wednesday.

The bloc's Stability and Growth pact was suspended in 2020 due to COVID-19 and is due to return in an amended version next year, with Italy pushing to make it more lenient as opposed to demands from other members to enforce tough discipline.

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"I am not ruling out any of the options, I think we have to assess what is best for Italy," Meloni told the upper house in a speech ahead of a summit of EU leaders in Brussels on Dec. 14-15.

Last week, Reuters reported that Rome was ready to veto any rules penalising its heavily-indebted economy and would not ratify a reform of the European Stability Mechanism (ESM), the euro zone bailout fund, without a satisfactory deal on the stability pact.

"If no solution is found, if no agreement is reached we will go back to the previous parameters," Meloni said before the Senate, adding that she would do her best to promote a good deal in the upcoming talks with her European peers.

EU rules limit budget deficits to 3% of gross domestic product (GDP) and debt to 60%, with disciplinary measures for those who do not reduce their surpluses fast enough, but many European governments far exceed these limits.

The European Commission has proposed tweaking the rules by introducing a fiscal adjustment path focused on spending cuts over four to seven years.

But Germany, the bloc's largest economy, has also called for highly-indebted countries, such as Italy, to cut debt by at least 1% of GDP each year.

Italy in September raised its deficit target for next year to 4.3% of GDP from 3.7% previously, and said it would not return to the EU's 3% ceiling until 2026, with virtually no debt reduction over the same period.

In October, Italy's central bank said economic growth would remain below 1% this year and in 2024.

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This article was produced by Reuters news agency. It has not been edited by Global South World.

By Reuters