Italy warned to cut budget deficit

ITALY has been warned by the European Commission to reduce its budget deficit or it will breach the 3% Stability Pact limit by next year.

The country, which has the highest borrowing ratio in the EU at 106% of GDP, is the sixth of the 12 eurozone countries to be in danger of breaching or to have breached the pact this year.

Meanwhile, the European Court in Luxembourg has begun hearing the case brought by the EC against the member states for refusing to abide by the Stability Pact rules.