The European Commission has once again raised concerns regarding Italy's 2020 budget plan. The executive arm of the European Union requested more clarification about the country's spending plans.
According to CNBC, Brussels submitted a letter to the Italian government that stated the proposed budget "plans a change in the structural balance in 2020 amounting to a worsening by 0.1 % of GDP."
The EU executive group went on ask why the country's net primary expenditure is expected to expand by 1.9 percent in 2020 instead of dropping by 0.1 percent - a figure that is also not in line with the previous agreement that the structural balance will be improved by 0.6 percent of the gross domestic product next year.
Despite the shuffle in government powers in Italy after last month's new government oath-taking, the conflict between Brussels and Rome appears to intensify further over the country's fiscal path.
However, it's not just Italy that's being put under the microscope. Finland, Belgium, Spain, Portugal, and France are also being questioned by the European Commission. It remains to be seen how the said countries will respond to Brussels' call for additional clarification.
Earlier this month, a Politico report noted that the Italian government, now ruled by the populist 5Star Movement, is a new coalition that appears to have similar spending plans like that of the previous ruling power.
The government raised the deficit target for next year in a bid to curb the effects of an automatic value-added tax increase that was initially expected to come around in early 2020.
While Italian Finance Minister Roberto Gualtieri revealed that he is hoping for a "constructive dialogue" with Brussels regarding Italy's fiscal path, the move earlier this month proved to be a problem for the Commission.
Gualtieri insisted that the move was made to help resolve the country's overall tax evasion issues. He said Italy's structural issues will only be resolved if tax evasion is first eliminated or dramatically reduced.
Meanwhile, Reuters reported on Monday that Italy's biggest bank, UniCredit, has plans to revive the financial institution's share price. Sources with knowledge of the matter told the outlet that the bank's goal is to gauge whether it can keep itself resilient from the country's declining economy.
UniCredit Chief Executive Jean Pierre Mustier is scheduled to unveil a new business plan for the bank on December 3. Under the new plan, the bank will set up a sub-holding firm in Germany to assist with the company's foreign operations.
Industry experts said the bank may be looking to be less Italian as the country continues to struggle with its structural systems and economic development.
