Europe's Next Crisis? Brussels rejects Italy's budget plan
Could it really be a bigger existential threat to Europe than Brexit or the Greek debt crisis? Italy's government has been given three weeks to respond after becoming the first eurozone member ever to see its national budget rejected by Brussels. Who will blink first in this brewing standoff between the Commission and a populist coalition in Rome that decided that reining in the continent's second-biggest public deficit could wait?
Instead, Rome wants to make good on its promises to most notably lower the retirement age and launch basic universal income for the neediest. Italians are sick of austerity and yes, there might well be an element of political theatre.
But it's almost as if Prime Minister Giuseppe Conte's visit to Moscow this Wednesday was scheduled to serve as a reminder that this new government is no friend of the mainstream blocs at the helm of the EU. The far-right's Matteo Salvini has eased off talk of quitting the euro but credit downgrades seem to have only served his cause so far in this standoff, with an unusually high 60% of Italians approving of the government.
Now, can the EU rise to the challenge and offer a win-win solution? It's not going to be easy, with Salvini's populist allies in Austria, Germany and points north parting ways with Rome when it comes to matters that touch the pocketbooks of all those who share the euro as a currency.
Produced by Charles WENTE, Laure FOURQUET and James VASINA