The Italian national flag, left, flies alongside the European Union flag (EU) at the Banca d’Italia, the Italian central bank, in Rome, Italy. (Photographer: Alessandra Benedetti/Bloomberg)

Italy's Populists Urged by EU to Reconsider Their Fiscal Stance

(Bloomberg) -- European Commission Vice President Valdis Dombrovskis said Italy’s economic difficulties should push the populist government to review its fiscal position.

Dombrovskis, in a Bloomberg Television interview with Francine Lacqua and Taylor Riggs, said the Italian coalition’s program initially caused some financial instability, increased interest rates and hurt confidence, leading to a slowdown in the nation’s economy.

“This is another reason for Italy’s government to reconsider its fiscal trajectory and ensure that both the budget deficit and debt are on a downward path,” Dombrovskis said Tuesday.

Italy slipped into recession in the fourth quarter of last year. While some recent data have shown the economy may be starting to pick up, the European Commission predicts gross domestic product will grow a scant 0.2 percent this year.

“From all EU member states, Italy has the most pronounced slowdown of the economy,” Dombrovskis said.

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