Economics Commissioner Joaquim Almunia presented a report to the Commission in Strasbourg yesterday. (The report is here: pdf). Essentially Almunia argued that Italy’s deficit at 106% of GDP was way above the target 60% set by the new version SGP. He also argued that it was neither temporary, nor the product of exceptional circumstances (the two other criteria). The document will now go the rounds for two weeks of ‘technical consultation’ before a final decision is taken at the next Ecofin meeting.

“The Italian economy minister, Domenico Siniscalco, signalled a fight against the commission, saying he disputed its assessment and would seek support among finance ministers this weekend.”