The European Commission on Tuesday gave Italy and France a 24-hour deadline to explain their budget plans.
The commission wrote to warn them that they could be out of step with the currency bloc’s rules.
The commission gave Oct. 15, the deadline for all 19 eurozone states to send their draft 2020 budgets to Brussels.
Italy in particular has been criticised for doing too little to tackle public debt, one of the country’s main problems.
As the EU’s executive arm, the commission has oversight powers over eurozone countries’ budget plans.
It can ask for corrections in them and eventually threaten sanctions if its requests are ignored.
The eurozone limit for public debt is 60 per cent of gross domestic product (GDP).
Italy’s new centre-left government plans a public debt increase to 135.7 per cent of GDP this year, and a slight fall to 135.2 per cent for 2020.
In Rome’s case there is a risk of significant deviation from EU recommendations for 2019 and 2020 due to rising government expenditure and a worsening structural balance.
EU commissioners Valdis Dombrovskis and Pierre Moscovici warned in the letter.
At the same time, they acknowledged Italy’s request for flexibility derogations from budget discipline rules and promised a thorough assessment of it.
Italian economy ministry sources said Finance Minister Roberto Gualtieri would reply to Brussels by Wednesday, as requested, and said the EU letter was expected and is part of a normal dialogue.
France defended its budget plans on Tuesday.
Paris made the choice to lower taxes in a period of economic slowdown to reflect the domestic social situation and the present state of the international economy, Finance Minister Bruno Le Maire said.
French President, Emmanuel Macron cut taxes in a bid to assuage yellow vest protesters.
The letter was part of routine commission communication with eurozone states, Le Maire added, and Paris will respect its euro area debt reduction commitments.
The French 2020 public deficit will be 2.2 per cent of GDP, the lowest level in close to 20 years, according to the minister.
The commission also sent letters on Tuesday to Belgium, Portugal and Spain.
All three countries submitted draft plans while they await the formation of new governments.
In Spain’s case, this will involve new elections in November.
The commission therefore asked the three countries to submit further information as soon as possible.
Finland, which filed its budget ahead of time, also received a letter from Brussels.
Helsinki answered on Oct. 16, defending its plans and noting that, despite the deviations, it was not at risk of breaching EU debt and deficit ceilings. (NAN)