EU’s Economy Chief Attacks Italian Government Amid Deficit Spat

(Bloomberg) -- A top European Union official accused the Italian government of being “resolutely” euro-skeptic and xenophobic, in comments likely to play into the hands of Rome officials who claim that the bloc is using double standards in its assessment of member states’ budget plans.

European Commissioner for Economic and Financial affairs Pierre Moscovici made the comments at a speech in Paris, warning of a rift in the EU between moderates and “illiberal and nationalist” forces led by Hungary’s Prime Minister Viktor Orban.

“The Italians have also chosen a resolutely euro-skeptic and xenophobic government that, on migration and budget questions, is trying to escape European obligations,” Moscovici said, according to a transcript of his prepared remarks.

Tensions between Brussels and Rome are running high after the Italian government said it would increase the country’s budget deficit to 2.4 percent of economic output next year to fund election-campaign promises. As Italian bond yields hit four-year highs on Tuesday, EU Commission President Jean-Claude Juncker warned the wrangling over Italy’s budget could provoke a Greek-style crisis in the currency bloc.

“I don’t give a damn,” about threats from the European Union,” Italian Deputy Premier Matteo Salvini said on Italian national television Canale 5. “Someone wants a weak Italy, an Italy on its knees and full of migrants” so that foreign businesses can buy up Italian companies, he said.

In his speech at the International Economic Forum of the Americas conference in Paris, Moscovici said divisions in the EU are so deep that consensus on urgent issues is no longer possible. Efforts to strengthen the euro area, in particular, are at a standstill and the impact on the bloc could be greater than the debt crisis, he said.

“It’s a political crisis that is potentially much more dangerous because it threatens the very survival of the EU,” Moscovici said.

©2018 Bloomberg L.P.