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EU asks Italy to explain failure to reduce debt

May 29, 2019
Italian Interior-Minister and Deputy-Premier Matteo Salvini meets reporters at the Interior Ministry headquarters in Rome, Monday, May 27, 2019. Hardline Interior Minister Matteo Salvini's League party - who is casting himself as the standard bearer for populist far right in Europe - won the Italian vote and jumps from 6 to 28 seats in the European Parliament. (AP Photo/Andrew Medichini)
Italian Interior-Minister and Deputy-Premier Matteo Salvini meets reporters at the Interior Ministry headquarters in Rome, Monday, May 27, 2019. Hardline Interior Minister Matteo Salvini's League party - who is casting himself as the standard bearer for populist far right in Europe - won the Italian vote and jumps from 6 to 28 seats in the European Parliament. (AP Photo/Andrew Medichini)

MILAN (AP) — The European Commission has sent the Italian government a letter asking it to clarify why the eurozone’s third-largest economy has not made sufficient progress in reducing debt.

A European Commission spokesperson confirmed that Wednesday’s letter from EU Finance Commissioner Valdis Dombrovskis and EU Economic Commissioner Pierre Moscovici asks for a response by the close of business Friday.

Italy’s public debt is over 132% of GDP, far above the EU’s 60% limit.

The country won EU approval for its 2019 budget only after reducing the deficit to acceptable levels. But public finances are back in the spotlight since right-wing populist leader Matteo Salvini’s strong European parliamentary election victory emboldened him to announce new measures that will increase next year’s budget deficit on top of his ongoing challenge of fiscal rules.

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