Italy’s Populists Say Europe Wants a ‘Blood and Tears’ Budget

(Bloomberg) -- Italy’s populist government pushed back against the European Union, saying demands by partners to change its budget would ruin the country and that the bloc seems incapable of countering a broad economic slowdown.

EU partners including Austria “are asking Italy for a ‘blood and tears’ budget,” Deputy Premier Luigi Di Maio told reporters in Rome. “It is unbelievable that they don’t understand our reality."

Di Maio said that the administration is trying to avoid an excessive deficit procedure over its spending plans for next year, but that it has no plans to change key measures which would mean “sacrificing Italians.” Premier Giuseppe Conte told reporters on a visit to Abu Dhabi he will speak to commission head Jean-Claude Juncker early next week to try to avert the procedure.

The European Commission may soon take its next step toward financial sanctions for Italy, with a rejection of the country’s budget for being in breach of EU fiscal rules expected to come on Nov. 21.

The ruling coalition of Di Maio, of the anti-establishment Five Star Movement, and Matteo Salvini of the anti-migration League, earlier this week told Brussels it would stick to its deficit and growth targets as it seeks to finance election promises.

Finance Minister Giovanni Tria, at a business conference in Padua in northern Italy, took the EU to task over economic growth prospects. Forecasts by the European Commission, the bloc’s executive arm, for a slowdown in Italian growth also point to a narrowing gap with growth in France and Germany, Tria said.

“The problem of economic growth is a European one and should be tackled together, and not in a separate and confrontational way,” Tria said. “Europe does not seem to be aware of the situation and appears to be incapable of adopting macro-economic policies of stabilization.”

By maintaining its 2.4 percent budget deficit target and 1.5 percent growth forecast for next year, Rome is defying warnings by the commission, which had demanded changes to ease concerns about the country’s debt mountain. The commission could in the coming weeks kick start a long and complex process with possible fines imposed on Italy.

©2018 Bloomberg L.P.