Moscovici opens on flexibility “If he loses Renzi risk subject to considerable debate – The guardian

BRUSSELS, The opening is more political than technical, but is intended to influence the negotiations between the government and the Commission in view of the presentation of the draft budget on 15 October. In Italy, “there is a threat of populist” and “it is for this reason that we support the efforts of the U to be a strong partner within the European Union”, said yesterday the commissioner for economic Affairs, Pierre Moscovici, confirming the determination of the executive community to reach a compromise with the government which takes into account the expiration of the 4 December on the referendum on constitutional reform. The judgment on the public finances will come in November and there is a real risk of a procedure for excessive deficit, because the numbers contained in the update note of the Def, Italy violates the rule of the debt and does not maintain the commitments made in may on the structural adjustment to be achieved in 2017.

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“I trust that Italy, as always, he would manage and resolve all his problems with our help,” said Moscovici in an interview with Bloomberg. In charge of negotiating with the government on behalf of the Commission, Moscovici will have a meeting with the minister of Economy, Pier Carlo Padoan in Washington, on the sidelines of the annual meetings of the International Monetary Fund. Discussions are ongoing “on the banks” and “on the balance sheet,” revealed the commissioner. Moscovici reiterated some of the stakes of the negotiations on the accounts. Flexibility was introduced last year and Italy has already benefited from reforms and investments. “We have said that we would be ready to consider costs for the crisis of refugees or an earthquake or a country that suffers from terrorist attacks such as Belgium,” added Moscovici. “But it is the flexibility of precise, limited, and clearly explained”.
According to several european sources, the update note of the Def, instead of dispel doubts, li has aggravated. As things stand, Italy is not absolutely compliant,” says an official involved in the negotiations between Brussels and Rome. The willingness to help Renzi should push the Commission to smooth out the most possible numbers to meet some of the demands of the government.

However, in Brussels, stressed that “there are limits”. Some of the costs of the earthquake and the migrants will be considered as “exceptional circumstances”, but the engineers of the Commission doubt that you can get the 0.4% deficit add that the government intends to ask Parliament. “It’s a figure much lower”, anticipated by the officer. Another small margin of less than 0.1% of Gdp should come from a new method of calculation of the output gap. But there is also the possibility that the economic forecasts of the Commission indicate a deficit in the nominal top of the 2%, that would force the government to make further efforts for the next year. Despite the political support, in the meeting with Padoan, Moscovici should seek to amend the objectives of the Def. The Commission wants the draft budget law is planned in an effort to structural higher than the content in the update note. The net balance structural “needs to improve 0.2%” so that Italy can be considered to be “broadly in line” with the rules of the Stability Pact, explains the official. With the indicators of the deficit in nominal, de net balance of structural and de debt “in the red, we would be forced to the procedure”, explains the officer.