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October 23, 2018

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Italy stands firm against EU in row over budget

Italy’s leader yesterday gave no indication that his government would rein in public spending plans, keeping alive a dispute with the European Union, which wants the country to revise its budget.

Italian Prime Minister Giuseppe Conte defended the deficit-busting budget in a news conference in Rome following the noon deadline for Italy to submit it response to the EU’s rebuke of the draft budget.

The plan increases the deficit to 2.4 percent of GDP next year, three times more than initially targeted. The EU complains that the plan means Italy will not lower its public debt as promised. At over 130 percent of GDP, debt is more than twice the EU limit.

Asked what he would do if the commission rejected the budget, Conte replied “we will sit at a table to discuss it.”

While he wasn’t explicit, Conte’s comments made clear that the government did not make adjustments in its budget, as EU officials had hoped.

Conte repeated that the budget was “well-conceived,” and that it would promote economic growth.

He noted that the 2.4 percent deficit level was a ceiling and held out the possibility that it would not reach that level in 2019. He also repeated that it would be brought lower in the following two years.

Italy’s plans have widely been criticized by many EU leaders and the EU Commission chief as being out of line with the bloc’s spending constraints.

The EU handed Italy a stinging letter last week warning that the significantly higher deficit targets represented a deviation “unprecedented in the history” of EU budget rules.


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