The threat of criminal proceedings against Italy for excessive borrowing is for the time being, averted.

Rome had made sufficient concessions, said EU Commissioner for Financial Affairs, Valdis Dombrovskis on Wednesday. The Italian government’s proposed solution, while not ideal, however, a method to be avoided.

in the face of a looming deficit procedure, the Italian government had on Monday announced cuts in their budgets for the coming year. The borrowing would be in order at 2.04 percent of the gross domestic product – instead of 2.4 percent as originally planned. Economic growth to 2019 is forecast therefore with a 1.0 percent instead of 1.5 percent.

according to media reports, Rome will open by further privatisation of two billion Euro. In addition, a series of tax reductions to the test to come, in order to tap new revenue.

“Italy needs to urgently restore confidence in its economy, in order to improve the financing conditions and the support for investments,” said Dombrovskis also according to the agreement. He hoped that the current solution could be the basis for a balanced budget and economic policy in Italy.

The original Italian draft budget for 2019 was rejected by Brussels in October and a fraction of the EU budget rules are denounced. The government in Rome wanted to Fund with your budget, among other things, a basic social security, tax breaks as well as a lower retirement age. The new debt would be three times as high as that of the previous government with the EU Commission promised.

Italy has about 2.3 trillion euros, one of the highest national debts in the world. That’s the equivalent of more than 130 percent of economic output. An excessive deficit procedure against Italy would have led in extreme cases to billion-dollar fines for Rome, or for the withdrawal of EU aid.

ssu/AFP/Reuters