World Economy

Italy Facing Setbacks

Italy Facing SetbacksItaly Facing Setbacks

Italian Prime Minister, Matteo Renzi, attempts to reach a deal with the European Commission over the 2016 budget before the economy tumbles further, according to Reuters. Italy faces a barrage of economic setbacks, including a shortage of revenue and a postponement of privatization initiatives. The government expected 1.6% growth for 2016, but such a goal seems unattainable now. Uncertainty lingers as the Italian government works with Brussels over the budget situation. The EU is taking a special interest in Italy because growth within the Eurozone hinges on the expansion of major economies such as Italy. Italy has been the slowest-growing economy in the EU in the past decade, with GDP expansion coming in at 0.8% in 2015, half the average growth within the Eurozone. The bickering between Brussels and Rome started when the prime minister violated fiscal EU policy by raising goals for public debt and the deficit. Renzi is asking for more flexibility, but EU officials believe they have given Italy enough wiggle room in expanding the budget.