Italy says France now facing same deficit problem

Italy's Deputy Prime Minister Luigi Di Mao said Tuesday that France's recent budget concessions risk breaching European Union rules, just like Italy's have done, adding that he expected Brussels to treat Paris and Rome in the same way.

An increased deficit "will create a French problem, after the Italian problem, if the rules are the same for everyone," Di Maio said Tuesday, after France joined Italy in putting its spending interests ahead of the European Union's budget rules .

Italy's budget for 2019 was the first in history to be rejected by Brussels for breaking previous commitments to reduce borrowing. and the populist government of Di Maio's Five Star Movement (M5S) and Matteo Salvini's far-right League is trying to come up with another draft.

Meeting the EU's three percent deficit limit had been a centrepiece of Macron's European strategy in order to win the trust of powerful Berlin and its backing for EU reforms.

That was before the "yellow vest protests," which have rocked his government to the core.

Rising deficit
Looking to defuse countrywide protests, Macron on Monday announced a raft of concessions that risk shunting France's 2019 deficit above 3 percent.

Among the potentially costly measures, include a 100 euro monthly increase in the minimum wage as of next year paid for by the government, not employers.

The 40-year-old centrist also announced he would roll back most of an unpopular increase in taxes on pensioners introduced by his government.

And he called on all businesses "that can afford it" to give employees a one-off "end of year bonus" which would be tax free.

“If the deficit/GDP rules are valid for Italy, then I expect them to be valid for Macron,” Di Maio said, as his government works to reconcile its own big-spending budget with EU disciplinary measures.