Italy’s new populist leaders appear to be sticking to the program that brought them to power: In their budget plans, they’re charting a course that could ultimately put the entire European project at risk.
Since forming a government last spring, the coalition of the anti-establishment Five Star Movement and right-wing League has kept everyone guessing about its genuine intentions.
Now comes a moment of truth, as the coalition sets out its budget for 2019. It’s not looking good. After much deliberation, the government is aiming for a deficit of 2.4 percent of gross domestic product, up from a projected target of 0.8 percent under the previous administration.
Minor as the difference might seem, it could have big consequences for Europe. Italy’s debt burden, at about 130 percent of GDP, is already the euro area’s highest after Greece. If investors lose faith that the government can get it under control, Europe’s leaders could find themselves facing the awful options of trying to rescue Italy, overseeing an unprecedented debt restructuring, or allowing the euro’s third-largest economy to exit.
Editorial on 10/06/2018
Print Headline: Italy puts Europe at risk