Gentiloni Warns Budget Concerns Will Return This Fall

(Bloomberg) -- While Italy was recently spared European humiliation over the poor state of its public finances, the country’s problems could soon return, a former prime minister has warned.

“I’m not sure at all that we will have a normal autumn,” Paolo Gentiloni said on Sunday in an interview in the French city of Aix-en-Provence. Being spared the excessive deficit procedure after engaging in talks with Brussels was positive, but the “problems we have of confidence, of reputation in financial markets, of very low growth in the last year are very difficult to tackle and they will be back in our debate in October,” he added.

Paralysis in the government could lead to elections next year, as it’s unable to make decisions on so many issues, Gentiloni said. Lawmakers may not be able to agree on a budget because of divisions in the government and “the dominance of nationalist positions,” he said.

Earlier this month, the European Commission decided to withhold disciplinary action against Italy over its debt after the government offered fresh commitments that address some of Brussels’s concerns. The commission’s decision marked a significant detente between Italy and the EU after a long tussle over the country’s debt mountain.

Gentiloni, 64, served as prime minister for the last 18 months of Italy’s previous government, before the Five Star-League coalition took office in June of last year. He’s now second in command for the opposition Democratic Party.

To contact the reporters on this story: Angelina Rascouet in Aix at arascouet1@bloomberg.net;Caroline Connan in Aix at cconnan@bloomberg.net

To contact the editors responsible for this story: Geraldine Amiel at gamiel@bloomberg.net, James Amott

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