Italy warns of border chaos if Brussels rejects its budget

The country says the cost of dealing with the migrant crisis and natural disasters have strained its finances...

Italy warns of border chaos if Brussels rejects its budget

Daniel Ochoa de Olza AP/Press Association Images / Migrants sit on the dock after disembarking from the Clipper Hebe, the ship that rescued them, upon arrival at the port of Augusta, on the island of Sicily, Italy, Saturday, June 4, 2016.

Italy's finance minister has issued a stark warning to EU officials and politicians across the union - warning that failure to allow it to run a budget deficit which is higher than EU rules will result in a tightening of its borders.

"Europe must choose which side to take. They can accept the fact that our deficit goes up from 2% to 2.3% to tackle the earthquake and the migrant emergencies ... Or they can choose the Hungarian way, which puts up walls against the migrants and must be rejected. That would be the beginning of the end," Pier Carlo Padoan told la Repubblica.

This is part of a long running argument surrounding the size of Italy's budget deficit - Reuters comments that European Commission officials are considering sending a letter to Italian officials warning against breaking budget rules.

The country also faces a constitutional referendum on political reform in October, Matteo Renzi, the Italian prime minister, has said that he will step down if it is defeated. His pledge has added to Italy's political instability, Citi Bank has described the vote as, "probably the single biggest risk on the European political landscape this year outside the UK."

Mr Renzi has defended that country's budget plans: "We did a very serious budget, with a deficit ratio of 2.3 per cent and as usual anonymous spokespeople say the EU is perplexed and will reject it."

"What will Brussels say ‘no’ to? Money for Amatrice [town hit by a major earthquake]? Money for schools? Two billion more for healthcare? Well, they should tell us,” the Financial Times reports.