European Commissioners have said France’s plans do not fall foul of the rules, as they will only put the country in breach of the budget deficit limit for one year, rather than the three Italy had originally planned.
That was enough for Italy’s leaders to complain of different treatment, seeing as Italy recently became the first country ever to have its budget plan rejected by the Commission. Many of the public in Italy and beyond would likely take a similar view.
Taking a less conspiratorial stance, one could say that it is the rules that are the problem — a one size fits all system for countries with such varied economies as those in the eurozone is a frequent and valid criticism. National governments also need to react to circumstances, meaning a budget cap may be inherently flawed.
But to the Italian whose living conditions have deteriorated over the last decade, speaking of the fairness in fine print is only likely to drive them into the arms of populist parties.
The Commission’s green light for France will only fuel support for those parties come May’s European Parliament elections, particularly in Italy. While there is still much work needed to unify the eurozone’s capital markets and monetary system, it seems the populist transmission mechanism is working perfectly.
