Clifford Chance

Italy's budget and the EU's excessive deficit procedure: What's going on?

5 December 2018

The European Commission and Italian government are currently engaged in a power struggle over Italy's draft budget for 2019. The Commission argues the budget is in breach of the 1997 Stability and Growth Pact and has called on Italy to make amendments. The Italian government is resisting and, as a result, risks the Commission commencing an Excessive Deficit Procedure.

This briefing outlines the requirement of Member States to submit their draft budgets to the European Commission, how failing to ensure alignment with EU fiscal policies can result in an Excessive Deficit Procedure and what the implications for Italy could be if such action is taken.

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