Divine Intervention Sought Amid Growing Doubt About Italy Budget




  • In Business
  • 2019-02-11 15:09:31Z
  • By Bloomberg
 

(Bloomberg) -- Italy's promise to meet ambitious budget targets is being met with growing skepticism by the euro area, after the country slipped into recession at the end of last year. For some peers, meeting these targets could even require divine intervention.

"I'm a Catholic, so I believe in miracles, and that keeps me calm, even when it comes to Italy's ability to deliver on its deficit-reduction target," Slovak Finance Minister Peter Kazimir said in Brussels ahead of a meeting with his peers from the currency bloc. Italy isn't formally on the agenda of Monday's meeting.

Rome's populist government is facing renewed criticism of its economic policies after new signs of a slowdown fueled speculation that additional measures would be needed to spur growth and contain the deficit within the European Union's budget rules. The latest warnings come after the European Commission cut its 2019 growth forecast for the country to 0.2 percent from an earlier projection of 1.2 percent, the lowest among the euro zone's 19 members.

The lowered outlook comes two months after Rome and Brussels reached a compromise over Italy's deficit target following protracted negotiations. The Italian government initially sought a higher target, which rattled the euro area and helped make Italian bonds among the worst-performing securities of the region last year.

"During our negotiations, the Italian authorities corrected the fiscal trajectory quite substantially but the damage to the economy has been already done," European Commission Vice President Valdis Dombrovskis said ahead of the Brussels meeting on Monday. "Now it's important that Italy continues to stick to responsible fiscal policies in order to allow the economy to rebound."

Concerns about Italy's growth and deficit targets come amid signs of broader weakness in the euro area. Several finance ministers warned that countries including Italy should do their homework and bring their finances in order as mounting data point to a persistent slowdown in the bloc.

"There is a concern about many countries," Austrian Finance Minister Hartwig Loeger said on his way into the meeting. "What I see as the most important factor is that there are many countries who did not use the upswing to consolidate their budgets," he said, adding that Italy was among them.

Dutch Finance Minister Wopke Hoekstra said it was important that countries took steps to ensure their economies were strong before the tide of the economic cycle turns. "We see that there is less growth in a number of countries and that makes it all the more important to make sure that we use the time that we have to balance our budgets and push through for reforms," he said.

--With assistance from Joao Lima and Lyubov Pronina.

To contact the reporters on this story: Viktoria Dendrinou in Brussels at vdendrinou@bloomberg.net;Lorenzo Totaro in Rome at ltotaro@bloomberg.net;Radoslav Tomek in Bratislava at rtomek@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Nikos Chrysoloras, Jones Hayden

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

COMMENTS

More Related News

Politics and finance dog EU climate zero efforts
Politics and finance dog EU climate zero efforts

Momentum is growing across Europe toward a mid-century target for climate neutrality that UN scientists say the world must embrace to avert catastrophe. Ursula von der Leyen put the mid-century target atop her programme to the European Parliament before it confirmed her on Tuesday as the new European Commission president. "I want Europe to become the first climate-neutral continent in the world by 2050," von der Leyen told the assembly, eliciting strong applause.

Hong Kong Protesters Who Stormed Legco Seek Asylum in Taiwan, Apple Daily Says
Hong Kong Protesters Who Stormed Legco Seek Asylum in Taiwan, Apple Daily Says

(Bloomberg) -- Dozens of Hong Kong protesters involved in the ransacking of the city's Legislative Council this month have arrived in Taiwan to seek asylum, the Apple Daily newspaper reported.About 30 protesters have already landed in Taiwan, while as many as 30 others -- and possibly more -- are planning to try soon, the Hong Kong newspaper said, citing unidentified people who assisted them.The fleeing activists were part of the group that smashed into the legislature on July 1, the paper said. The people who assisted the protesters told the paper they had been in contact with Taiwan's Mainland Affairs Council, which handles the island's relations with Beijing, to seek help.The council...

Italy police deal blow to
Italy police deal blow to 'violent' Nigerian mafia

Italian police said Thursday they had arrested 19 suspected members of a Nigerian mob, including the leaders of a clan which forged alliances with other mafias and violently punished anyone who rebelled. In an operation dubbed "Burning Flame", coordinated by police in Bologna and Turin, over 300 officers carried out arrests and searches in nine cities across northern Italy from Bergamo to Modena, Parma and Ravenna. A two-year probe -- aided significantly by a man on the inside who fed details to investigators -- "has allowed us to destroy much of what, within the Nigerian community, is known as the 'Maphite' cult," police said in a statement.

SAP Tumbles as Cloud Growth Slows, Push for Profitability Stalls
SAP Tumbles as Cloud Growth Slows, Push for Profitability Stalls

The decrease in growth in new cloud bookings, a keenly watched metric because it indicates future revenue, underscores the difficult transition to internet-based software as Chief Executive Officer Bill McDermott challenges rivals such as Salesforce.com Inc. and Oracle Corp. Cloud sales can initially be less profitable than traditional on-premise installations, and while the company has pledged to increase its non-IFRS operating margin by 1 percentage point a year on average through 2023, profitability was flat in the second quarter. SAP's second-quarter performance was "underwhelming," Citi analyst Walter H. Pritchard said in a note to clients, citing "light" cloud bookings and...

Apple Chip Supplier
Apple Chip Supplier's Solid Performance Shows Resilience in Trade Fight

(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. projected current-quarter revenue ahead of estimates, as the Apple Inc. supplier shrugs off a smartphone slump and U.S. sanctions on Huawei Technologies Co. to ride demand for cutting-edge chips.The world's largest contract chipmaker expects sales

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.