In an report published over the weekend, the bloc's economics commissioner said that the E.U. needs looser budgetary policies and a complete revision of the fiscal rulebook.
In the Italian financial daily Il Sole 24 Ore, Paolo Gentiloni, due to replace Pierre Moscovici as economic and financial affairs commissioner, said,
“It’s time for countries which have fiscal space to use it, in an overall context of less restrictive budgetary policies,”
A warning from former Italian prime minister says, “the risks of a prolonged period of low growth must not be overlooked” with the task of invigorating the economy “cannot be left to monetary policy alone”.
Gentiloni is set to examine Italy’s draft 2020 budget submitted to the Commission last week with great diligence.
Said draft will raise next year’s structural deficit. This excludes the effect of GDP growth fluctuations by 0.1% of gross domestic product. In turn, this reverses Rome's previous commitment, lowering it by 0.6%.
Valdis Dombrovskis, E.U.'s Commission Vice President, stated in an interview last Friday that Brussels would ask clarifications from Italy regarding budget.
Despite the inquiry, analysts expect the Commission to be lenient so as to avoid conflict with Rome like last year's.
Gentiloni, also said in an interview that it was crucial that the budget plan be generated by the government which has a constructive view on the E.U.
http://lexatrade.com/news/less-restrictive-budget-policies-needed-according-to-incoming-eu-economy-chief