October 17, 2018 / 10:36 AM / 4 months ago

Italy budget could be rejected, rating downgrade possible: govt official

People wearing signs that read "We want dignity for workers" (R) and "We have work but no salary" protest in front of the Italian Ministry of Labour office in Rome, Italy, October 16, 2018. REUTERS/Tony Gentile

ROME (Reuters) - Italy’s 2019 budget may be rejected by the European Commission and a credit rating downgrade is also possible, a senior government official said on Wednesday.

“Let’s say that the premise is there” for the commission to start an infraction process over the budget, Stefano Buffagni, cabinet undersecretary for regional affairs, said in an interview with Radio Capital.

“Premier (Giuseppe) Conte is going to the EU to explain the motivations” behind the budget, he added.

With Moody’s and Standard & Poor’s due to review Italy’s credit rating this month, Buffagni said a downgrade “can’t be excluded and we must be ready” in case it happens. He added, however, that he did not think a downgrade would be justified because “Italy has very solid economic fundamentals”.

Reporting by Steve Scherer, editing by Giulia Segreti

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