If Italy does not comply with the European Central Bank's budget rules it will result in higher borrowing costs, according to EU (ECB) Vice President Luis de Guindos. Brussels is mulling a substantial fine as Rome once again has failed to present a reasonable budget in the face of a debt pile reaching 130% of GDP. As a result, Italy's bond yields surged, widening bond spreads and increasing costs for the state, meaning the benefits of higher spending may well be negated in the long run. De Guindos stated that this can be avoided by adherence to European fiscal rules.
If Italy does not comply with EU budget rules it will result in higher borrowing costs, according to the European Central Bank's (ECB) Vice President Luis de Guindos. Brussels is mulling a substantial fine as Rome once again has failed to present a reasonable budget in the face of a debt pile reaching 130% of GDP. As a result, Italy's bond yields surged, widening bond spreads and increasing costs for the state, meaning the benefits of higher spending may well be negated in the long run. De Guindos stated that this can be avoided by adherence to European fiscal rules.