On Tuesday the European Commission agreed that Italy should enter the excessive deficit procedure as agreed in the Stability and Growth Pact. According to the latest figures from the EUROSTAT – the European statistical body – Italy had a deficit of at least 3.1% in 2003 and 2004, whereas the agreed level is 3%. The projected deficits for 2005 and 2006 are set to exceed 3.1% even if Italy manages to overcome the current mild recession.
Both EU and Italian government officials where quick to point out that the outcome should not be seen as a “war†between the EU and Italy, but rather as an means for the two bodies to work together to improve the economic situation in Italy. Prime Minister Berlusconi stated that for him this was not a worrying development and excluded the possibility of raising taxes, while the Economy Minister Siniscalco said the development should not be construed as a “tragedy†for Italy.
Nevertheless, this development has also intensified the general debate about Europe and the Euro, with polls in Italy showing that support for the EU is at the lowest level ever among Italians, even though only a very small minority agree with proposals to exit the Eurozone altogether.
