The European Union's fiscal rules cannot be "dogma" and should be altered to take account of the current economic and political climate, premier Giuseppe Conte stated Wednesday after the EU executive said Italy's mounting debt justified a disciplinary procedure.
EU fiscal rules "need to be changed because they were developed in different a political and economic context from the current one," Conte said during a visit to Vietnam.
"These rules cannot be viewed as dogma," Conte underlined.
The European Commission estimates that Italy public debt will climb to 133.7% of economic output (GDP) this year and to 135.2% in 2020, in breach of EU rules that say it should go down.
Italy's debt pile as a percentage of its GDP is the second highest in the EU after Greece’s.
The country's big-spending populist government has made limited progress in responding to the EU's economic recommendations and has not carried out necessary structural reforms, according to the European Commission.
This situation “may negatively affect Italy’s growth potential,” the Commission said.
Italy's deputy premier and leader of the far-right Northern League party, Matteo Salvini, said on Wednesday that Rome would try to obey EU fiscal rules but not if these meant impoverishing Italians.
If EU member states agree to launch a so-called ‘excessive debt procedure’ against Italy within the next two weeks, this could eventually lead to a multi-billion euro fine and strict controls on Rome’s fiscal policies.
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