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The move came six months after the Commission and the Italian government struck a compromise to avoid triggering the process, which could lead to a €3.5 billion fine, although Brussels has shied away from imposing such penalties in the past.
The Commission's decision to launch the Excessive Deficit Procedure (EDP), a program intended to bring government spending back in line with EU rules, highlighted Rome's isolation on the EU stage. Also on Wednesday, the Commission released Spain from the procedure, meaning Italy is the only country now with a financial black mark against it from Brussels.
“We look at [Italy’s] main macroeconomic indicators, and they are all flashing red ... [the] budget deficit is growing, public debt is growing, growth is slowing down,” European Commission Vice President Valdis Dombrovskis told reporters in Brussels.
Dombrovskis lamented “the damage recent policy decisions are doing” to the Italian economy.
But the Italian government — made up of the far-right League and the anti-establishment 5Star Movement — sounded a defiant note, saying higher public spending is necessary to reboot Italy's struggling economy.
"We don't want other [countries'] money, we just want to invest in jobs and growth," Matteo Salvini, deputy prime minister and League leader, said on Wednesday after the Commission's announcement.
"The only way to reduce the debt created in the past is to cut taxes and allow Italians to work more and better ... With cuts, sanctions and austerity, debt, poverty and unemployment grew. We must do the opposite," he added.
The 5Stars' European Parliament delegation issued a statement saying: "The Commission is once again applying double standards... Italy is the only country at risk of being sanctioned while others — like Germany and The Netherlands — have been ignoring EU parameters with their enormous surpluses."
The Commission will now ask the Council of the EU to formally launch the EDP. The Council is widely expected to give the green light within two weeks. [...]
Opening remarks by Vice-President Dombrovskis on the European Semester 2019 Spring Package