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Italy budget: Rome promises to stick to plans, despite the EU's concern

Image CopyrightAFP Image TextsBest Friends? The Italian Prime Minister Giuseppe Conte discussed the closure of the budget with the Head…

 Italian Prime Minister Giuseppe Conte turns to the camera and laughs when led by the President of the European Commission Jean Claude Juncker

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Best Friends? The Italian Prime Minister Giuseppe Conte discussed the closure of the budget with the Head of the European Commission

The Italian government says it will adhere to its budget plans with high budget utilization and to create a potential position with the EU over its deficit.

PM Giuseppe Conte, who held talks with Deputy Matteo Salvini and Luigi Di Maio on Monday, said that the targets for 201

9 had already been established.

But Di Maio earlier suggested that the government might be willing to cut

The European Commission has threatened fines, unless Italy revises its plans.

The Italian government has promised to “end poverty”, and deepen the government’s planned budget deficit.

Italian media was on Monday morning reporting that the deficit could be cut from a planned 2.4% to 2.2% of GDP – but government sources quoted by Reuters suggested the deficit could be reduced to as low as 2%.

Deputy Prime Minister Luigi Di Maio suggested the government could be willing to reduce the deficit target to end the stand-by with the EU saying that “during the deficit process, the deficit needs to be reduced a bit, that’s not a big deal”.

However, in a joint statement later on Monday, the three men seemed to take a harder line and said: “The goals already established are confirmed.”

Italy’s budget proposal contains expensive measures to introduce a guaranteed basic monthly income of approximately £ 780 (£ 700) for poor families, and extensions to retirement age.

Monday’s statements followed a Brussels-Brussels summit between Conte and European Commission President Jean-Claude Juncker.

It was not clear how any reduction of spending would be financed if the main choices promises were made by the ruling populist league and five star parties remained untouched. Nor was it sure that the changes would suffice to satisfy the European Commission.

“Sleeping In Instability”

The Commission announced yesterday that Italy “sleeping in instability” and opening a case under the euro area “excessive deficit procedure” were now on the cards.

Fines during that procedure may begin with 0.2% of Italy’s entire GDP – which would measure in billions of euros.

The reason for Europe’s concern is that while Italy is the third. The largest euro area economy, with a GDP of more than two trillion euros, also has a big debt.

Euro area rules say that the countries should keep their deficits to less than 3% of GDP – as Italians make plans – but also keep government debt to 60% of GDP or less.

Many countries exceed the debt limitation without taking any action. But with almost 132% of GDP, Italy has the second highest rate in the block.

When Brussels received Italy’s budget proposal, it said that the country’s refusal to deal with its debt and essentially tripled the planned deficit was unacceptable.

Italy continued to require investments to start the weak Italian economy and reduce the suffering of the people.

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