Italian minister says EU deal on fiscal rules unlikely this year

By Giuseppe Fonte and Angelo Amante

ROME (Reuters) – Italy’s economy minister accused the European Union on Friday of being a politically weak entity unable to take swift decisions, warning the bloc was unlikely to wrap up negotiations on its new fiscal rules before the end of the year.

Speaking at a festival hosted by Prime Minister Giorgia Meloni’s Brothers of Italy party, Giancarlo Giorgetti said the EU still lacked a real political dimension and compared it to a “condominium meeting” where attendees only look after their own interests.

“Europe is incapable of taking any strategic decision in a timely manner,” Giorgetti said.

The minister, a senior member of the co-ruling League party, told the panel Italy would like the EU to draft its own tax for big tech companies such as Apple to help finance its common budget.

“If Europe was a political subject, it would make such a decision,” he said.

The minister sounded sceptical over the EU’s chance of striking a deal on new fiscal rules, which need to be revamped after being suspended in 2020 due to the COVID-19 pandemic.

He said there was “little chance” of wrapping up negotiations next week at a video conference of the bloc’s finance ministers, after Meloni this week threatened to veto any deal that would penalise Rome.

The European Commission has proposed tweaking the rules by introducing a fiscal adjustment path focused on spending cuts over four to seven years. Germany, the bloc’s largest economy, has also called for highly-indebted countries, such as Italy, to cut debt by at least 1% of GDP each year.

Giorgetti said this month Italy wanted to pursue its fiscal adjustment over a seven year period, provided it implemented its post-COVID recovery plan, and “without further conditions”.

“We are playing this game with courage but also with cleverness,” Giorgetti said, commenting the negotiations.

(Reporting by Giuseppe Fonte and Angelo Amante; Editing by Alvise Armellini and Mark Potter)