Italian Treasury ex-chief economist and MNI...>

ITALY: Italian Treasury ex-chief economist and MNI Connect Board Member Lorenzo

Codogno (as LC Macro Advisors) sent a note Monday re next steps for Italy:

- By 15 Oct, the government will have to send the Draft Budgetary Plan to

Brussels. By 20 Oct, it will unveil the actual Budget.

- By 22 Oct, the Commission will send the first letter to the Italian

government...offering a week to make adjustments and resubmit. Most likely, the

government will insist with its original targets and Budget, so by 29 Oct there

will be an official rejection by the Commission (an EU first).

- Around 21 Nov: official opinions on Draft Budgetary Plans of all countries at

Economic and Financial Committee, junior committee of Ecofin. 

- It could make a formal recommendation on Art. 126(3), which is the first step

to push Italy into an excessive deficit procedure...technically speaking there

should be enough time to escalate the procedure for a decision by ministers in

early Dec and then by the European Council by year-end. 

- More likely it will require more time and the actual decision will come in

early 2019. Sanctions would only be a last resort in case of non-compliance.