Published On: Fri, Oct 12th, 2018

Italy parliament DEFIES EU backlash as it BACKS government deficit plan | City & Business | Finance


EU officials have signalled that such a budget would see Italy break eurozone spending rules.

Last night saw the The Senate approve the budget law by 165 votes to 107, while the lower house also went ahead with the plans, passing it by 331 to 191.

Italy now has until Monday to present a draft budget to Brussels.

The government has already pledged to reduce the headline deficit to 2.1 percent in 2020 and to 1.8 percent in 2021.

Earlier this week saw the indebted populist nation warned to stick to EU rules over its budget as the International Monetary Fund (IMF) took sides with Brussels.

Maurice Obstfeld, chief economist for the IMF, said: “Our concern about Italy is that there is a real imperative for the fiscal policy to maintain the confidence of markets.

“And we have seen the spreads increase over the past months.

“This has certainly contributed to our downgrade of Italian growth and makes the economy more susceptible to shocks.

“So we think it is important that the government operate within the framework of the European rules, which are also important for the stability of the eurozone itself.”

Italy’s debt is already the second highest in the eurozone as a share of economic output after Greece, at about 131 percent of GDP.

The eurozone sets overall targets of 3 percent annual deficits and commits countries to move toward 60 percent overall debt.

Deputy Prime Minister Matteo Salvini branded top Brussels officials the “enemies of Europe” and accused financial speculators of banking on “the failure” of his country.

Mr Salvini, leader of the nationalist League party, attacked the European Commission and its senior figures and pledged to use next year’s European elections fight back with a populist “front of freedom”.

He said: “Those who want to speculate on the Italian economy should know that they are wasting time.

“We are against the enemies of Europe — Jean-Claude Juncker and Pierre Moscovici — shut away in the Brussels bunker.

“The politics of austerity of the last few years have increased Italian debt and impoverished Italy.”



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Italy parliament DEFIES EU backlash as it BACKS government deficit plan | City & Business | Finance