BRUSSELS Feb 22 The European Commission warned
Italy on Wednesday it could launch a sanctions procedure over
the country's growing debt if Rome did not by the end of April
adopt new belt-tightening measures worth at least 0.2 percent of
its gross domestic product.
The move puts further pressure on the Italian government led
by the centre-left to adopt unpopular measures as the country
possibly faces early elections this year while eurosceptic
forces are on the rise.
But the EU executive commission had little room for leniency
as Italy is set to increase its huge public debt despite
obligations to cut it.
The latest round of Commission economic forecasts for the
28-nation bloc showed Italy's public debt would rise to an
all-time high of 133.3 percent of gross domestic product this
year from 132.8 percent in 2016.
EU rules say Italy should instead reduce its debt by about
3.6 percent of GDP annually.
Publishing a report on Italy's debt, the Commission
confirmed that the country needs to "credibly" enact additional
measures worth at least 0.2 percent of its GDP by the end of
The request follows a letter sent to Rome in January urging
further measures to reduce its structural deficit, which
excludes the impact of the business cycle and one-offs. This
would in turn see its debt fall.
Rome has already committed to adopt new measures. The new
warning is meant to put pressure on Italy to deliver on its
A disciplinary decision would only be taken, a Commission's
note said, after Brussels has all data available for its next
economic forecasts, which are expected in May.
A sanction procedure could end up with hefty fines, although
this has so far never happened. It would, however, send a
warning to markets which have already started to ask higher
yields for Italian bonds.
(Reporting by Francesco Guarascio; editing by Philip