Italy along with the Isle of Man received the criticism of the European Commission, taking steps to force them to scrap illegal tax breaks for yachts and private jets or face a lawsuit in European court.
The Berlaymont said incorrect value added taxes levied by Italy and the Isle of Man breached common tax rules and distorted competition.
The Commission clarified that it had sent a letter of formal notice, which is the first step in its infringement proceedings, to Italy for not levying the correct amount of VAT on the leasing of yachts.
It also warned Italy about its system of exemptions for fuel used to power charted yachts in EU waters, in a notice called a “reasoned opinion“. In case of non-alignment with the EU rules, the court action will follow in due time.
At present yacht owners in some harbors of Italy suffer damages as a result of intense storms. Italian news agency #ANSA said 180 yachts were destroyed in the by waves, including many superyachts, and one boat belonging to former Prime Minister Silvio Berlusconi.
Italy at the edge of an infringement procedure if the government does not change its draft budget plan for 2019, European Commission Vice-President for the Euro Valdis Dombrovskis said. The Commission has rejected the plan, which sees Italy running a deficit of 2.4% of GDP next year, saying it would breach the Stability and Growth Pact. Berlaymont has also requested Rome to change the package by November 13.
The Italian government has repeated it does not intend to revise the budget, arguing an expansive package is needed to boost growth and bring down the debt-to-GDP ratio.
Deputy Premier Matteo Salvini responded to the European Commission’s decision to reject Italy‘s budget draft and request a new package within three weeks, assessing it as an “attack” on the Italian economy.
The Commission regards the proposal, which suggests Italy running a deficit of 2.4% of GDP next year to help finance pledges for a basic income, a pension overhaul and a two-tier flat tax, is of high risk leading to a breach of the Stability and Growth Pact.
The government, however, says critics of the draft are failing to consider the positive effect the generous budget will have on a growth and, in the process, on bringing down the debt-to-GDP ratio. “We are here to improve the lives of the Italian people,” Salvini said to RTL radio when asked about Berlyamont‘s verdict. “It seems to me to be an attack based on prejudice”. “It’s an attack on the Italian economy because someone wants to buy our companies on the cheap. “If they keep giving slaps for no reason, I’ll start to want to give more money to the Italian people.
“All the budgets that have passed through Brussels in recent years have made the debt rise by 300 billion euros”, Salvini concluded.
He also added that the Commission could send a “dozen of letters” of criticism to Rome, but the budget still would not change.
European Commission President Jean-Claude Juncker said to Der Spiegel that “we will ask more questions in the coming days” on the Italian budget which the EC rejected earlier this week.
“But I will also meet Premier Conte in the next few weeks,” he continued.
“Dialogue continues,” said the boss of Berlaymont.
British Brexit minister Dominic Raab said the parliament will have sufficient time to debate any exit deal Prime Minister Theresa May agrees with the European Union, and that lawmakers will have a real say on whether to approve it or not. However not all of them are convinced by minister’s promise, preferring to deliver personally their message to EU27 top negotiator Michel Barnier.
Senior Brexiteers held ‘constructive‘ talks with the EU27 top negociator Michel Barnier in Brussels today, but they denied undermining Prime minister Theresa May efforts.
Former Cabinet ministers Iain Duncan Smith and Owen Paterson, together with Lord David Trimble, held talks at the EU Commission Berlaymont building.
The delegates promoted their vision of an EU-Canada model of free trade to follow in shaping Brexit deal, putting forward the policy of the Tory European Research Group.
The fragmentation of British public opinion vis-à-vis Brussel creates apparent frictions in the process of Article 50 talks, weakening the officially mandated negotiator position Dominic Raab, who is facing complex consequences of “tribalisation” of the UK politics.