IN THE END, festive spirits prevailed—sort of. On December 19th the European Commission settled a quarrel with Italy’s populist government over its budget for 2019. The commission gave a grudging thumbs-up to a compromise plan which Giuseppe Conte (pictured), the Italian prime minister, had presented the night before to Valdis Dombrovskis, the EU’s commissioner for the euro.
Italy undertook to trim its nominal budget deficit from 2.4% of GDP to 2%. The commission reluctantly agreed that the structural deficit, which leaves out one-off measures and cyclical effects, should remain unchanged next year. “The solution on the table is not ideal,” Mr Dombrovskis grumbled. But ideal or not, it allows the commission to avoid opening a procedure that could have led to the imposition of multi-billion euro fines on Italy for straying from the path of fiscal righteousness (as mapped out by Brussels).