Markets brace for Italy's new budget proposal

Europe Takes a Deep Breath as Action Against Italy ApproachesMore

In a first for the European Union, the Commission rejected the budget last month, saying that it represented an "unprecedented deviation" from the bloc's spending rules.

The unlikely alliance of deputy premiers Luigi Di Maio and Matteo Salvini has stuck to the government's 2.4 percent budget deficit and 1.5 percent growth forecast targets for next year.

"The budget will not change, neither in its balance sheet nor in its growth forecast". In a nutshell, the Italian budget deficit is projected to be larger than their GDP growth which means that the debt-to-GDP ratio would increase. On top of the simmering tensions between the European Union and the Italian government, investors are also expressing concerns above the negotiations between the United Kingdom and EU over Brexit.

The far-right League and Five Star Movement (M5S) plan to run a public deficit of 2.4 percent of GDP in 2019 - three times the target of the government's centre-left predecessor - and 2.1 percent in 2020.

Italy will also promise "safeguard mechanisms" to ensure no overshooting of the 2.4% deficit target, the source said.

A report showing Italy is in breach of the EU's debt rules would be another step down the path toward potential financial penalties.

In its October World Economic Forecast, the International Monetary Fund predicted Italy would grow by 1 percent next year, 0.9 percent in 2020 and 0.8 percent in 2021 - far below government estimates.

Last week's meeting between Eurogroup President Mario Centeno and Giovanni Tria, the Italian Minister of the Economy, did not signal a breakthrough in the standoff.

Goldman Sachs bankers 'cheated' Malaysia over 1MDB, Mahathir says
Goldman Sachs stated that it was cooperating with the authorities and could possibly be looking at paying hefty fines. Leissner pleaded guilty and has agreed to pay $43.7 million in restitution of ill-gotten gains.

It would be "suicide" to attempt to reduce the deficit to the previous goal of 0.8 percent of GDP, he has said, insisting "we must get out of the trap of weak growth".

Speaking Tuesday to the European Parliament, German Chancellor Angela Merkel said the EU wanted to reach out to Italy, a founding member.

In a procedure for excessive deficit, European Union governments get several opportunities to weigh in and Italy could be given as much as six months more to comply once the process starts.

Last week the commission produced its own economic forecast, which contradicted Italy's predictions contained in its budget.

"The strong market reactions to political events in the past have sparked new concerns about the links between banks and sovereign debt in some parts of Europe - this is the basis of the request for fiscal discipline and compliance with the rules", he said.

Italy's rightwing populist government argues its planned budget will stoke the country's stagnant economy through a mix of generous welfare spending, tax cuts, and investments.

Uneasy investors, who demand a higher return to put their money into Italian assets, have already cost the taxpayer an additional 1.5 billion euros in interest over the past six months, according to the Bank of Italy.

A wider fear is that stress in Italy could spread to other European countries which are only just recovering from the eurozone debt crisis.

Related News:

  • Grim search for more fire victims; 42 dead across California

    Grim search for more fire victims; 42 dead across California

    Here are some of the best satellite pictures of the fires so far. "These are extreme conditions", Osby said. Smoke from the devastating California wildfires has reached MI , but it won't be around for long.
    Ocasio-Cortez Joins Crowd of Youth Protesters at Nancy Pelosi's Office

    Ocasio-Cortez Joins Crowd of Youth Protesters at Nancy Pelosi's Office

    This week, she and other newly elected House Democrats and Republicans have converged in Washington , D.C. for orientation week. Adam Schiff , D-Calif. speaks to reporters on Capitol Hill in Washington .
    Donald Trump, after visit, slams France’s Emmanuel Macron as relations sour

    Donald Trump, after visit, slams France’s Emmanuel Macron as relations sour

    A bottle of white of white wine from the European Union exported to the United States has a customs duty of 5 USA cents. Trump suggested Macron might have been trying to divert attention from his low popularity ratings and problems at home.
  • SoftBank unveils $21 billion IPO of Japan mobile business

    SoftBank unveils $21 billion IPO of Japan mobile business

    SoftBank hopes that putting a value on the telecoms business will help bolster its own share price, which it sees as undervalued. After the public listing, Softbank Group, the parent, is to hold about 63 percent of the wireless unit.
    Rhoden Family murder suspects arrested

    Rhoden Family murder suspects arrested

    Attorney John Clark, who represents the Wagner family, says they look forward to their day in court so they can clear their names. DeWine said at the time that there were children in the house, noting a mother was killed in bed with a 4-day-old infant.
    Jamal Khashoggi murder recording doesn’t implicate Saudi prince: U.S

    Jamal Khashoggi murder recording doesn’t implicate Saudi prince: U.S

    Prince Mohammed has tightened his grip in the past year since being appointed Crown Prince last June at the age of 31. Under mounting pressure, Saudi Arabia has changed its narrative about Khashoggi's killing.
  • China's stealth fighter steals the show at Airshow China 2018

    China's stealth fighter steals the show at Airshow China 2018

    Sunday also marks the 69th anniversary of the founding of the People's Liberation Army Air Force. Thrust vector technology uses a nozzle on a jet's exhaust to change its direction.
    Dow tanks 600 points, tech gets rocked

    Dow tanks 600 points, tech gets rocked

    A steep drop in technology companies sent USA stocks sharply lower, knocking 500 points off the Dow Jones Industrial Average. A steep drop in technology companies sent US stocks sharply lower, knocking 500 points off the Dow Jones Industrial Average.
    Kuchar pulls four clear in Mexico

    Kuchar pulls four clear in Mexico

    A bogey on 10th saw him fall to one-under, before he birdied 11th, 13th, 15th and 17th holes without dropping any more for a 66. To be exact, it was both guys' first win in 1,666 days. "I was hoping to have a three or four-shot lead for some wiggle room".
  • Netflix update adds support for 2018 iPad Pro lineup

    Netflix update adds support for 2018 iPad Pro lineup

    Apple said during the iPad Pro announcement that there was a number of magnets in the new tablets - over 100 of them, in fact. The iPad Pro 2018 models come with support for iPhone X-like gesture navigation, due to the departure of the home button.
    Owner Of Pellegrini's Cafe Sisto Malaspina Named As Bourke Street Attack Victim

    Owner Of Pellegrini's Cafe Sisto Malaspina Named As Bourke Street Attack Victim

    The state funeral for Sisto Malaspina is planned for next week, the details of which are still to come. His love and passion for his customers remained the same for over 40 years.
    Ex-Browns coach Hue Jackson lands in Cincinnati

    Ex-Browns coach Hue Jackson lands in Cincinnati

    During his two and a half seasons as their head coach, Jackson orchestrated just three wins and had 36 losses and a tie. Jackson will rejoin Marvin Lewis' staff as a special assistant to the longtime Bengals head coach.

Most liked

Google Night Sight debuts for all Pixel phones
The process begins today, but it may take some time before it arrives on all the Pixel smartphones out there in the wild. Night Sight also uses machine learning to adapt to the various lighting situations that might be present.

Microsoft introduces system-wide light theme in Windows 10 19H1
More than a month after pulling the Windows 10 October Update , build 1809, Microsoft is re-releasing it to the general public. New features in Windows 10 1809 include the Your Phone app, security improvements and upgrades to wireless projection.

Scott to step down from elections board responsible for certifying results
Florida is trying its best to get all recount votes in by Thursday but many issues have arose in the process of getting there. Bill Nelson late last Tuesday, but more than a week later the race remains uncalled by The Associated Press.

U.S. Officials 'Harden' Border With Mexico To Prepare For Migrant Caravan
It will be the first time Mattis will visit the troops at the border that were ordered to deploy there last month. The plan is for many to turn themselves in at the San Ysidro Port of Entry and ask the USA government for asylum.

Mismanagement of forests to blame for California fires
All Malibu schools in the Santa Monica Malibu Unified School District will remain closed until Wednesday, the district announced. Meanwhile, the acreage for the Hill Fire, which erupted Thursday in the Thousand Oaks area, was estimated at 4,531 acres.

US's Bolton says more sanctions likely on Iran
US Secretary of State Mike Pompeo said on Friday his country hopes to work with China on sanctions imposed on Iran. A reactor upgrade promised under the nuclear deal is also continuing with USA acquiescence.

Real Madrid confirm Solari as coach until 2021
Real Madrid have confirmed that defender Sergio Reguilon suffered a hamstring injury in the 4-2 win at Celta Vigo on Sunday. Real Madrid still lie sixth going into the worldwide break but they are only four points behind leaders Barcelona.

Patrick Mahomes’ Girlfriend’s Stepfather Died After Collapsing At Chiefs Game
Mahomes joins Trent Green and Joe Montana as Chiefs quarterbacks who have appeared on the magazine's cover per its archives. Brittany Matthews revealed on her Instagram page that Paul Massey died after suffering a medical episode on the sidelines.

Oil's Collapse Deepens as Supply and Demand Concerns Roil Market
U.S. futures closed down 7.1 per cent for a record 12th straight decline and the lowest since November 2017. Both crude benchmarks have fallen more than 20 per cent since peaking at four-year highs in early October.

Palestinians celebrate ceasefire, Israelis show anger on the streets
Israel retaliated on Monday, bombing Hamas posts and headquarters as well as the building housing Hamas' Al Quds TV station. The blockade has ravaged Gaza's economy, and Israel refuses to lift it unless Hamas disarms, a demand the militants reject.

Rohingya flee refugee camps in Bangladesh as Myanmar prepares for first returnees
"Although we still think that the conditions are not conducive now for the refugees to return in Myanmar", he told AFP. Abul Kalam, Bangladesh Relief and Repatriation Commissioner, said he was hopeful the process could begin on Thursday.

Google adds always-on VPN to its Project Fi cellular service
Google announced today that it is introducing enhanced networking functionality to its Project Fi wireless network. However, Google is warning that the VPN service will increase your data use by about 10 percent.

Federal Bureau of Investigation data shows sharp rise in U.S. hate crimes
In 2017, over 4,000 of the more than 7,000 hate crimes were against a person, as opposed to against property. Anti-Muslim hate crimes were down about 11 percent, according to the report.

Finnish PM: Russia possibly behind Global Positioning System jamming
Although it is not a member of NATO, Finland took part in Trident Juncture as an allied country, as did Sweden. Finland's state Air Navigation Services issued a warning to civilian air traffic earlier last week.

Murray, Henshaw to miss All Blacks clash
Conor Murray and Robbie Henshaw have been ruled out of Ireland's remaining Guinness Series matches against New Zealand and the USA.