EU reassures Italy on spendings

Brussels: The European Commission told Italy on Saturday that increased spending linked to the coronavirus outbreak will not be included in calculating its deficit, in a letter made public on Twitter.

Valdis Dombrovskis, vice-president of the European Commission and Paolo Gentiloni, the economy commissioner, pointed out the commission´s "flexibility" in the letter to Italian finance minster Roberto Gualtieri.

Brussels and Rome have wrangled repeatedly over Italy´s fiscal policies, but the country now faces exceptional circumstances owing to an outbreak of the coronavirus. "Any one-off budgetary spending, incurred in relation to the response to the outbreak, would be excluded by definition from the computation of the structural balance and not taken into account when assessing compliance with the required fiscal effort under the existing rules," they wrote.

"We would like to stress that our fiscal rules framework provides for flexibility to cater for ´unusual events outside the control of government´, while being mindful to the preservation of fiscal sustainability."