{"id":3118,"date":"2019-04-25T17:46:22","date_gmt":"2019-04-25T17:46:22","guid":{"rendered":"http:\/\/euromenaenergy.com\/?p=3118"},"modified":"2019-04-25T17:46:22","modified_gmt":"2019-04-25T17:46:22","slug":"italys-fiscal-dispute-with-eu-might-resume-after-debt-exceeds-forecasts","status":"publish","type":"post","link":"https:\/\/emimer.com\/?p=3118","title":{"rendered":"Italy\u2019s fiscal dispute with EU might resume after debt exceeds forecasts"},"content":{"rendered":"
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Reuters\/ Brussels<\/p>\n<\/div>\n

<\/div>\n

Public debt in Greece and Italy, the two most indebted countries in the eurozone, grew last year while the bloc as a whole saw its liabilities decrease, the European Union statistics office said yesterday.
\nRome\u2019s growing debt, which is also higher than Brussels had predicted, is seen as further stretching EU fiscal rules that require countries with high debts to gradually bring them down.
\nItaly, whose eurosceptic government adopted free-spending policies last year that have so far had little impact on growth, had debt equivalent to 132.2% of national output in 2018, or \u20ac2.3tn ($2.5tn), up from 131.4% in the previous year, Eurostat said.
\nUp to 0.2% of the Italian debt was due to derivative contracts, which are usually used to hedge against risks but triggered losses for 4.7bn euros in 2018, Eurostat data show.
\nOther eurozone countries have reduced their debt thanks to derivatives.
\nAlthough Rome has decreased its losses on derivatives from the \u20ac5.4bn posted in 2017, the negative impact over the country\u2019s debt has exceeded 25bn since 2015, data show.
\nThe European Commission, which monitors eurozone states\u2019 budgets, refrained in December from starting disciplinary steps against Italy over its growing debt. It predicted then that Italian debt would be 131.1% of gross domestic product in 2018 \u2014 lower than yesterday\u2019s data showed.
\nThe Commission has said it will reassess Rome\u2019s compliance with EU fiscal rules, including the requirement to cut debt, in June, taking into account the final debt data from Eurostat.
\nA spokeswoman for the EU executive declined to comment on the new figures released by Eurostat.
\nShe said Brussels\u2019 new evaluation of Italy\u2019s position will also be based on new forecasts due in May of debt developments, and on Italy\u2019s report on its fiscal plans for the next three years which Rome had just submitted.
\nItaly\u2019s 10-year government bond yield jumped to its highest in seven weeks yesterday, pushed up mostly by unease over government infighting and an upcoming ratings review.
\nItaly bucked the eurozone trend, as overall debt in the 19-country currency bloc fell to 85.1% of GDP last year from 87.1% in 2017, Eurostat said.
\nThe bloc\u2019s aggregated budget deficit also dropped to 0.5% of GDP from 1.0% in 2017.
\nThe fall coincided with Germany\u2019s reduction of its debt to 60.9% of GDP, from 64.5% in 2017.
\nThe bloc\u2019s largest economy also widened its public surplus to 1.7% of output from 1.0% in 2017.
\nIn Greece, debt climbed to 181.1% of GDP in 2018, the largest ratio in the eurozone.
\nThe increase from 176.2% in 2017 was mostly due to the last instalment of eurozone creditors\u2019 loans as part of the country\u2019s third bailout programme which ended last summer.
\nThe recent exit from the bailout programme exempts Greece from the normal application of EU rules that require countries with public debt above the 60% of GDP threshold allowed by EU law to cut the excess by 5% a year. Cyprus, another of the bloc\u2019s most indebted countries, saw its debt rise to 102.5% of GDP from 95.8%.
\nPortugal, which was also bailed out during the eurozone\u2019s debt crisis, saw its debt fall to 121.5% of output from 124.8%, while Belgium\u2019s debt declined to 102.0% of GDP last year from 103.4% in 2017.
\nFrench public debt was stable at 98.4% of output, while the country\u2019s budget deficit dropped to 2.5% of GDP from 2.8% in 2017.<\/p>\n","protected":false},"excerpt":{"rendered":"

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