Public Spending Problems

Bulgaria, Croatia, France, Portugal, and Italy are now facing the anger of the European Union. Each country was said to have violated the European Union’s rules for public spending. This announcement was made by the European Commission, which is the executive branch of the European Union. The European Commission will now keep a closer eye on each of those countries’ spending habits (The Local – Italy, 1).

Italy’s violations stem from two main areas. First, the Italian government has a very high level of debt. Second, high long-term unemployment figures will stymie future economic growth. Similar to the countries listed previously, Italy could face punitive action from and penalties levied out by the European Commission. Valdis Dombrovskis, the Vice-President of the European Commission, recently stated that countries which failed to improve their public spending practices “can be put in the corrective arm at any moment” (The Local – Italy, 1).

According to the European Commission’s website, the corrective arm is used to make members of the European Union conform to the Stability and Growth Pact. This pact establishes rules that members must follow to ensure logical and coordinated public financial policies in the European Union (European Commission, 1). Furthermore, countries with budget deficits must follow the Excessive Deficit Procedure. This requires member nations to limit their public deficits to “3% of deficit to GDP” and total public debt to “60% of debt to GDP” (European Commission, 1). It remains to be seen if Italy can follow through on the European Commission’s potential punishments. Team Mint Condition will keep our readers informed on any more announcements from the European Commission regarding Italy’s violation of the European Union’s rules for public spending.


“EU slams Italy for spending ‘imbalances’.” The Local (Italy). 08 March

2016. Web.

“The Corrective Arm.” European Commission. Web.


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