World Economy

Italy Closer to EU Budget Warning

Italy Closer to EU Budget WarningItaly Closer to EU Budget Warning

Italy and France moved a step closer on Wednesday to having their budgets humiliatingly sanctioned by Brussels, with four other countries also in the EU danger zone, a European source said.

Sending Italy and France, the second and third-biggest eurozone economies, back to the drawing board would be unprecedented for the EU and potentially explosive politically.

In addition to the two heavyweights, Austria, Slovenia, Malta and Finland have also been notified by the European Commission that their budgets for 2015 could be in serious violation of spending rules, the source said.

European Commission spokesman Simon O’Connor confirmed that some countries had been notified but refused to name them. However O’Connor insisted that any notification by the Commission to member states “does not prejudge the outcome of our assessment.”

Last week EU member states which use the euro currency submitted their spending plans for next year 2015 to the Commission, the EU’s executive branch, in accordance with vast new powers of oversight handed Brussels at the height of the eurozone debt crisis.

Under these new procedures, the Commission had until Wednesday to notify member states with accounts which raised questions, and a week after that to decide whether these countries were in “serious” breach of the rules. Brussels officials would then have the the power to demand changes to the budgets.