Italy holds budget meeting, 2019 deficit goal in focus
Italy's top ministers will meet on Monday to discuss the 2019 budget, with financial markets on edge over the big-spending plans of the anti-establishment government.
Prime Minister Giuseppe Conte told reporters the meeting would start at 18:30 (16:30 GMT) and a source in his office said it would be attended by Conte, Economy Minister Giovanni Tria and deputy prime ministers Luigi Di Maio and Matteo Salvini.
Daily Corriere della Sera reported on Monday that Tria, an academic with no party affiliation, is set on preventing the 2019 budget deficit from rising above 1.6 percent of gross domestic product (GDP).
That would be double the current 0.8 percent target but lower than what was expected until recently by financial markets, which fear the deficit will rise steeply to fund welfare spending and tax cuts promised by the ruling parties.
By 10:20 GMT Italy's benchmark 10-year debt costs stood at 2.89 percent, down from 2.98 percent on Friday, with traders citing Tria's commitment to keeping the deficit under control.
Italy's public debt of around 132 percent of GDP is the highest in the euro zone after Greece's and markets are concerned that it may rise further if government borrowing increases.
Tria is seen as the bastion of market discipline against the demands of the right-wing League and the anti-establishment 5 Star Movement, the two ruling parties.
Conte said Monday's meeting would focus on the measures to be included in the budget and how to fund them, and only at the end of the process would the deficit target be fixed.
"That will be the last thing you will know after we have put everything together," he said on the margins of a meeting on the World Health Organisation in Rome.
Corriere said Conte was expected not to challenge a 1.6 percent deficit limit while it would be more difficult to appease the two deputy prime ministers.
The government must set its deficit and debt targets for next year by Sept. 27, and present the budget to parliament by Oct 20.
Di Maio, the leader of the 5-Star Movement, told reporters in Milan the budget would respect the policy "contract" put together by the ruling parties before they took office in June, but it would also cut wasteful spending.
"This budget ...has to begin to cut everything that is superfluous, there can't be any more waste in this country," he said.
5-Star's flagship policy is a basic income of up to 780 euros per month for the poor, while the priority of the League, led by deputy prime minister and interior minister Matteo Salvini, is to cut taxes for both individuals and companies.
Both parties have said these measures will be phased in gradually starting from 2019.
Comments