Italian Deputy Prime Minister Matteo Salvini softened his tone on the EU’s budget rules on Wednesday, saying he would respect the bloc’s deficit limit of 3 percent of gross domestic product.
Italy has the second largest public debt in the EU after Greece, and Salvini has previously suggested the country may not comply with the deficit limit, saying the 3 percent rule is “not the Bible.”
But in an interview Wednesday with financial daily Il Sole 24 Ore, the leader of the far-right League said: “We want to introduce ourselves to Europe and the markets with a serious budget bill that will make the country grow, while respecting all EU obligations.” On Tuesday he was even more explicit and told reporters that “we’ll respect all rules, all obligations and all commitments taken: We can make this country grow and make Italians feel better without irritating those who look at us from above.”
Luigi Di Maio, the leader of the League’s governing coalition partner the 5Star Movement, also said Wednesday “we won’t challenge the European Union.” Just last week, Di Maio had said in an interview he “didn’t rule out” going beyond the 3 percent deficit limit.
Italian Finance Minister Giovanni Tria has reassured Brussels several times in the past that the country will respect the rules and not increase its massive €2.3 trillion debt.
Markets have been jittery in Italy after the new populist government took office in June. The difference between Italian benchmark 10-year bonds and the safer German equivalent — an indicator of investors’ trust — has almost doubled from around 140 points in February to the current 280 points.
In the meantime, Salvini has been trying to find new buyers for the debt. According to Il Corriere della Sera, when he met Viktor Orbán last week in Milan, the Hungarian prime minister told him that when Hungary went through its own economic troubles, Chinese investors helped Budapest to stay afloat. Salvini’s planned trip to Beijing has therefore become one of his highest priorities, according to the report.