Italy’s Tria Says Leaked Letter to EU Hurts Negotiations
Italy’s Tria Says Leaked Draft Letter to EU Hurts Negotiations
(Bloomberg) -- Italian Finance Minister Giovanni Tria said a leaked draft of his letter to the European Commission responding to its concerns about the country’s debt load damages negotiations with Brussels.
“There’s no doubt that damages negotiations with the European Commission,” Tria said in an interview with Italian daily Corriere della Sera. “That text wasn’t definitive, it was an incomplete draft with various open options; it wasn’t meant for publication, it shouldn’t have gotten out.”
Tria was referring to a draft of the letter that included a reference to reduced welfare spending. It was removed in the final version released late Friday after protests from the Five Star Movement, part of the governing populist coalition that includes the right-wing League.
The controversy surrounding Italy’s response to EU concerns about the government’s economic policy is the latest example of friction between the squabbling populist allies, who have clashed repeatedly in their first year of governing on issues ranging from immigration to welfare spending.
Pierre Moscovici, EU Commissioner for Economic and Financial Affairs, reiterated in a France Inter radio interview Sunday that while he doesn’t favor budget sanctions, Italy can’t ignore shared rules. “I think penalties are always a defeat. Still, if they don’t play at all by the book the European Commission and European states will have to step up to the plate.”
He said Italy and the commission need to find common ground. “For the moment my motto is: dialogue, dialogue, dialogue. And that’s what I’m doing with my Italian counterpart.”
Tria said in the letter’s final version to the EU’s Brussels-based executive that Italy will start a review of both the nation’s tax system and public spending in a bid to avoid an infringement procedure for failing to reduce its heavy public debt.
Prosecutor Probe
The Treasury said late Saturday in a statement that it filed a request with the Rome prosecutor’s office to open a probe into the leaked letter.
“I am glad that Prime Minister Giuseppe Conte decided to review parts of the letter that we could not possibly back such as a reduction in the spending for welfare,” Deputy Finance Minister Laura Castelli of Five Star said in a statement late Friday.
Tria criticized Castelli in the interview with Corriere della Sera. “If Castelli had that text, she shouldn’t have. It was a private document, a draft with my handwritten notes.” The minister added that he wasn’t seeking major cuts to welfare spending and the draft version referred to lower-than-estimated costs of measures such as the citizens income program.
Tria also reiterated that Italy’s budget deficit will be lower than the government’s 2.4% expectation and “way below” the EU Commission’s forecast of 2.5% of GDP. The commission is due to issue an updated report on Italian finances June 5.
Deputy Prime Minister Matteo Salvini, who led the League to victory in the recent European elections, reiterated on Sunday that the fractious coalition will go forward “if it maintains its commitment to cut taxes, and soon,” news agency Ansa reported.
--With assistance from Gaspard Sebag.
To contact the reporter on this story: Dan Liefgreen in Milan at dliefgreen@bloomberg.net
To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Crystal Chui, Cecile Gutscher
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