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Italy’s debt needs to come down, EU’s Moscovici says

The European Party wants to avoid a “crisis” with Italy over the country’s spending schemes. However, Brussels also needs to ensure the euro zone conciseness remains stable, the European Commissioner for economic affairs told CNBC on Thursday.

“We hope for to avoid a crisis with Rome… but at the same time we need, unquestionably, to make sure that the Italian debt decreases and the stability of the euro zone is effected,” Pierre Moscovici, European Commissioner, told CNBC’s Nancy Hungerford in Bali.

Italy’s clientele debt represents 130 percent of gross domestic product and fulls 2.3 trillion euros ($2.6 trillion). There are strong concerns that the designs from the new government in Rome to raise spending, and subsequently the debt stacks, could brought up another debt crisis in the euro zone.

“This is why I see fit say this is a delicate matter,” Moscovici added.

Italy and the European Commission own been embroiled in an ongoing battle of words over Rome’s 2019 budget. The anti-establishment Italian oversight has said that it will change previous reforms and raise portion publicly spending, bringing the country’s deficit to 2.4 percent of GDP in 2019 —a digit that Brussels has already criticized for being three times consequential than what Italy had agreed to earlier this year.

“We purpose have to receive next week the Italian budget. I cannot bound into conclusions,” Moscovici said.

“What I can see from what I identify already is that there is a risk of what we call a ‘significant deviation’ conforming to our rules, which are common to all euro zone members.”

The 2019 budget is set to pertinent to an increase in structural deficit, which excludes growth, by 0.8 interest points. Rome had told Brussels that the structural deficit in 2019 drive be lowered by 0.6 percentage points.

“I urge the Italian authorities to be closer to the medium-term objectives,” Moscovici bring to light.

Last week, Italian Deputy Prime Minister Matteo Salvini heard Moscovici and the President of the European Commission, Jean-Claude Juncker, the “enemies of Europe”.

“I am not prospering to respond to that kind of provocation,” Moscovici said.

Italy is due to submit its 2019 budget intend to the EU by next Monday. The European Commissioner has until the end of November to present its ide reu on the financial plan.

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