Sputnik: How could the EU punish Italy for defying its financial regulations?
James Newell: There was a meeting last night between Salvini and Di Maio; the Prime Minister and the Minister of Finance and it looks as though they are talking now in terms of cutting the budget deficit by 0.2%, so all the indications are at the moment that some kind of agreement can be reached.
I think they would like to find an agreement if they possibly can; although I think particularly on the side of the Italian government, they really need to find an agreement because an opinion poll came out last night which suggested 61% of Italians think that there really should be an agreement and a showdown avoided.
Ultimately; public opinion doesn't feel terribly strongly about these issues which are technical matters that are difficult to understand, but it would be will react to sell a showdown to the public, so if they possibly can reach an agreement then I think they will.
James Newell: The current level of debt stands at over 130%; the budget that's currently being proposed wouldn't do anything to reduce that. The danger is that if the debt gets too high; it becomes much more expensive to service, interest rates go up and that then has a knock on effect on the entire Italian economy, for ordinary consumers, for firms looking to borrow money to invest and the situation becomes very difficult indeed. So yes; it would be a very significant problem.
The views expressed in this article are those of the speaker and do not necessarily reflect those of Sputnik.
The views and opinions expressed in the article do not necessarily reflect those of Sputnik.