June 21, 2019 / 8:03 AM / a year ago

Italian PM sees difficult talks with EU, hopes to avoid debt procedure

Italian Prime Minister Giuseppe Conte arrives for the European Union leaders summit in Brussels, Belgium, June 21, 2019. Virginia Mayo/Pool via REUTERS

BRUSSELS (Reuters) - Italy’s prime minister said on Friday he was determined to avoid an EU sanctions procedure over the country’s growing debt, but acknowledged the situation was difficult.

“We have to avert it,” Giuseppe Conte told reporters as he arrived for the second day of an EU summit in Brussels. “It’s a difficult situation but I’m confident of a positive solution.”

In a letter sent to EU leaders before the summit, Conte said Italy’s deficit would be below EU Commission’s forecasts this year - but still slightly above what Rome had committed to in December when it narrowly averted an EU disciplinary action.

He also offered no clarifications on what Rome intends to do next year, when its deficit and debt are predicted to spike due to the free-spending policies of its eurosceptic executive.

Deputy Prime Minister Matteo Salvini threatened to quit the government unless he was able to push through at least 10 billion euros ($11 billion) in tax cuts, according to comments reported on Friday by daily Corriere della Sera.

Conte said he was due to hold talks with Commission President Jean-Claude Juncker later in the day, but that the discussion would not address the details of Italy’s finances.

It is unclear if Italy can stop the procedure, which Brussels has said would be warranted on the basis of 2018 data and EU forecasts.

It could be launched in early July, exposing the country to the risk of fines and prolonged financial monitoring.

Reporting by Francesco Guarascio, editing by Robin Emmott and John Stonestreet

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