EU May Give Italy Extra Time on Budget as Wrangling Drags On

(Bloomberg) -- The European Commission may grant Italy six additional months to comply with its budget requests if it proceeds to enforce its excessive-deficit procedure against the country, Corriere della Sera reported, without saying were it got the information.

Starting in January or February, the Commission would wait half a year before sending inspectors to Rome, giving the government time to adopt its recommendations, according to the report on Saturday. Corriere didn’t specify if the extra time would allow Italy to avoid sanctions linked to the procedure.

Italy’s populist government and the European Union are wrangling over the country’s 2019 budget. The Commission has rejected the plan from Rome to set next year’s deficit target at 2.4 percent of annual economic output.

The ruling League and Five Star parties may make some concessions, but they’re not willing to reduce the deficit to the EU’s recommended level, other Italian newspapers reported.

La Stampa said that the League’s Matteo Salvini and Luigi Di Maio, the leader of Five Star, would each be willing to cut spending enough to bring the deficit to 2.2 percent of GDP. The Repubblica newspaper said the government is ready to lower next year’s deficit to 2.1 percent of GDP. The EU wants the gap narrowed to 1.9 percent.

In reports quoted by Ansa, Finance Minister Giovanni Tria said Saturday an agreement with the EU is possible.

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