BRUSSELS — In a stinging and rare rebuke to a core member, the European Union sent back Italy’s proposed budget back to its populist government on Tuesday, saying that it posed unacceptable risks to Italy and the Eurozone.
The European Commission, the bloc’s administrative body, told Rome that it would have to rewrite its draft 2019 budget and reduce its deficits or face heavy fines early next year.
It was the first time the European Union rejected the proposed budget of a member nation that uses the euro, setting up a confrontation between Brussels and the Euroskeptic government that took power in Rome this year.
Italy has three weeks to negotiate with the commission and come up with a revised draft budget that meets the bloc’s guidelines, commission members said after a meeting in Strasbourg, France.
“The Italian government is openly and consciously going against commitments made,” said Valdis Dombrovskis, the commission vice president in charge of the euro and financial stability. Italy is guilty of “a particularly serious noncompliance” with eurozone rules, he said, and so, “for the first time,” the Commission is rejecting a draft budget.
“The dialogue will continue,” said Pierre Moscovici, the commissioner in charge of economic and fiscal affairs. “Our door is open to dialogue.”
While the Italian economy minister, Giovanni Tria, on Monday appeared to reject those demands, arguing that his government, an uneasy coalition of the populist Five Star and League parties, sees its budget as vital to rejuvenating the Italian economy, addressing social problems and keeping its promises to the voters, including tax cuts and increased welfare spending.
