The euro is slowly inching upwards as the markets eye the upcoming ECB meeting and GDP growth rate release. There are no changes in interest rates or year-on-year growth expected, although there are predictions of a slight increase in growth quarter-on-quarter.
These releases may for once be overshadowed. The budgetary dispute between the European Commission and Italy has entered a new stage, as the EC said yesterday afternoon that it would launch an EDP, or ‘excessive deficit procedure’ to bring the Italian government’s spending back in line with its rules. Vice President of the EC, Valdis Dombrovskis, told reports that ‘all [Italy’s macroeconomic indicators] are flashing red…budget deficit is growing…public debt is growing…growth is slowing down.’ Italian debt stands at 130%, far above the 60% maximum imposed by the EU.
The next step is now for the EC to make a formal request to the EU to launch the process. Italy’s government remains defiant, with Matteo Salvini saying they are ‘not like Greece’ and are ‘net contributors to the EU’ and need a ‘Trump-style stimulus.’
