EU executive offers exemption of Turkey migration funds from deficit figures

By Gabriela Baczynska

By Gabriela Baczynska

BRUSSELS (Reuters) - The European Union executive has told member states they can exempt their contributions to a 3 billion euro fund for Turkey for tackling the migration crisis to help them meet deficit targets, but it was unclear if the gesture would satisfy Italy.

Under a deal from last November, Ankara is to stem the flood of migrants reaching Europe in exchange for aid from the fund.

But Italy, which wants more leeway on its 2016 budget from Brussels, has been blocking payouts to Turkey in hope of winning wide spending exemptions from the EU.

To make contributions to the fund more palatable for governments which have to stick to prudent EU spending rules, the European Commission proposed in December to exempt such spending from deficit calculations under EU budget rules, Commission spokesman Margaritis Schinas told a news briefing.

The Commission did so in a footnote to the so-called Terms of Reference for the Turkey Refugee Facility, Schinas said, a document that has not yet been accepted by all governments.

Envoys of the EU's 28 countries are to discuss the document again on Wednesday.

Yet Rome's demands go further than the exemption proposed by the Commission. It wants, among other things, the EU executive to accept already now that Italy would spend an extra 3.2 billion euros this year on migration, increasing its deficit.

The Commission says that it can only evaluate migration-related spending after it takes place, assessing each item case-by-case.

EU diplomats had hoped that a meeting last week between Italian Prime Minister Matteo Renzi and German Chancellor Angela Merkel would "unblock" the matter, one EU diplomat said.

But another diplomat said Renzi left empty-handed, even though Italy, along with Greece, has been on the front line of migrant multitudes entering Europe.

"He got a clear 'no' to this. And now its up to the Italians to decide how much they want to push it," the person said.

(Editing by Jan Strupczewski and Mark Heinrich)