The EU is said to refrain from disciplinary action against Italy

The EU Commission is likely to decide not to take disciplinary action against Italy regarding its state finances, reports Italian news agency Radiocor.

Representatives of EU governments note a “significant improvement” after the Italian government introduced new measures during the past week.

The EU Commission’s meeting is still ongoing, but according to Radiocor’s sources, officials at the European Commission have proposed that no measures be taken and the proposal is expected to be adopted, something which is also reported by Reuters with reference to a source.

Similar information earlier in the day has already supported Italian interest rates. The ten-year interest rate now breaks below 1.7 percent and the spread against the German ten-year interest rate is at the lowest levels for over a year.

Italy’s deficit is expected to land at 1.9 percent of the country’s GDP, which is significantly lower than previously forecast. However, not all countries are as impressed. For example, Germany and the Netherlands are skeptical of Italy’s tax policy.

Earlier this week, the Italian government lowered its deficit target from 2.1 to 2.04 percent. In a letter sent by the country’s Prime Minister Giuseppe Conte and Finance Minister Giovanni Tria to the Commission earlier this week, they stated that revenues will increase and costs will also decrease next year.

However, Italy has not set any new budget target for 2020. The EU Commission already expects the deficit to land clearly above the 3 per cent allowed under the Stability Pact.