Italy and five other countries were at risk of breaking EU budget discipline rules with their 2017 draft budgets, the European Commission said in a statement yesterday.

The five other countries are Belgium, Cyprus, Lithuania, Slovenia and Finland.

“The Draft Budgetary Plans of these member states might result in a significant deviation from the adjustment paths towards the respective medium-term objective,” the Commission said.

The medium-term objective is a budget balanced in structural terms, which means excluding one-off spending and revenue and the effects of the business cycle.

Italy’s structural deficit, which excludes one-off items and economic cycle swings in income and spending, has been rising every year since 2014 and is to jump to 2.2 per cent in 2017 from 1.6 per cent in 2016 and then further to 2.4 per cent in 2018, according to Commission forecasts last week. This goes clearly against EU rules which say that countries have to cut their structural deficit by at least 0.5 per cent of GDP every year until they reach balance or surplus.

Italy says the higher structural deficit is due to extraordinary spending on migration and post-earthquake reconstruction. But the structural deficit indicator does not take into account such one-off items and the Commission called the explanation “not constructive”.

Yesterday, European Commissioner for Economic and Financial Affairs Pierre Moscovici sounded more accommodating.

“The significant part of the deviation is due to the cost of the seismic activity in the country, very serious this year and to migration inflows,” Moscovici told a news conference. “We will take that into account.

Italy is also breaking EU debt rules – its public debt has been rising for a decade and is to continue rising to reach a new high of 133.1 per cent of GDP next year from 133 per cent expected this year, according to Commission forecasts.