Italy 2019 deficit set for 2 per cent

BRUSSELS: Italy’s public deficit is “perfectly on track” to reach 2.04 per cent of gross domestic product in 2019, Prime Minister Giuseppe Conte said on Tuesday, rendering any EU disciplinary procedures unjustified.
“We’re on track with the forecasts that we’ve made,” Conte told journalists in Brussels.
“You’ll remember the famous 2.04 per cent for 2019, well we’re perfectly on track.” Rome and Brussels had initially agreed on the 2.04-per cent figure in December, but the Italian government was forced to raise the forecast to 2.4 per cent in March given the deteriorated economic outlook.
The cabinet calculated at a budget meeting on Monday that some 6.24 billion euros ($7.0bn) of additional revenues would now be coming in this year, while expenditure would rise only by an extra 130 million euros.
Furthermore, a huge chunk of money earmarked for early retirement payments has been frozen due to lower than expected demand.
So, the overall deficit for this year would be around 7.6 billion euros lower than anticipated, the cabinet said in a statement. It did not, however, calculate a concrete ratio figure.
“The best thing that we tell Italian citizens is that we’re not cutting social or other spending, these are additional receipts,” Conte said.
“We made prudent estimates for some elements… this is an update to our accounts.” On June 20, Conte had already suggested that Rome would achieve a deficit ratio of 2.1 per cent this year, while the EU
Commission is pencilling in a figure of 2.5 per cent for the bloc’s fourth-largest economy.
The Italian Finance Minister Giovanni Tria has said that the government regarded its budget as “perfectly in line with the rules of the Stability and Growth Pact,” under which EU members must consistently reduce their deficits and target a balanced budget in the long term.
“The adopted measures create the conditions which do not justify the initiation of excessive deficit procedures against Italy,” the minister said.
At the start of June, Brussels formally put Italy on notice about its deteriorating deficit and snowballing debt and opened an excessive deficit procedure which could result in an unprecedented fine of more than 3.0 billion euros for the country.
The decision has yet to be confirmed by EU member states.
The European Commission in October rejected the big-spending budget submitted for approval by the Italian coalition
government of the far-right League and the anti-establishment Five Star Movement. — AFP