October 20, 2018
Finance

Italian economy minister: Next budget is compatible with EU rules

Plans to reform Italys fiscal system as part of its next budget wont breach EU rules, according to Italian Economy Minister Giovanni Tria, who insisted Italy remained committed to reducing its debt and staying in the eurozone.

Proposals under discussion — including a flat tax, a so-called “citizens income” and undoing recent increases to the retirement age — would be “compatible with the [EUs] limits on public finances,” Tria told Italian daily Il Sole 24 Ore in an interview published Wednesday.

Trias comments come as the two ruling parties — the far-right League and anti-establishment 5Star Movement — started talks last week to hammer out their spending plans for next year.

As long as Italy does not exceed a deficit limit of 3 percent of its GDP, “it would be fine” for the government to move ahead with the current proposals, according to Tria.

He acknowledged a slowdown in economic growth this year — 1.2 percent rather than the anticipated 1.5 percent — would bring the budget deficit to about 1.2 percent of economic output in 2019. The previous government had forecast a budget deficit of 0.8 percent.

“Sure, there will be a slowing in respect to the tendency of a few months ago, but what counts is the continued reduction, and thats not in question,” he said.

League leader Matteo Salvini last week confirmed the government would move ahead with the tax cuts and pension reforms that formed a key part of his election campaign. Luigi Di Maio, the 5Stars leader, similarly insisted he would fight for his campaign pledge to introduce a “citizens income,” saying EU budget rules shouldnt be used as an excuse to block it.

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