{"id":2303,"date":"2018-10-04T01:47:23","date_gmt":"2018-10-04T01:47:23","guid":{"rendered":"http:\/\/baileyonlineclassroom.com\/europeandrussiablog\/?p=2303"},"modified":"2018-10-04T01:47:23","modified_gmt":"2018-10-04T01:47:23","slug":"italy-aims-to-cut-budget-deficit-after-eu-criticises-spending-plans","status":"publish","type":"post","link":"https:\/\/baileyonlineclassroom.com\/europeandrussiablog\/2018\/10\/04\/italy-aims-to-cut-budget-deficit-after-eu-criticises-spending-plans\/","title":{"rendered":"Italy aims to cut budget deficit after EU criticises spending plans"},"content":{"rendered":"

Italy\u2019s populist government will cut its budget deficit targets from 2020, after investors sold off Italian assets and\u00a0European Union<\/a>\u00a0ministers criticised its plans to jack up spending next year.<\/p>\n

The ruling coalition last week said it\u00a0planned to run a deficit<\/a>\u00a0of 2.4% of gross domestic product (GDP) next year, tripling the previous government\u2019s target. It also said that the deficit would stay at that level through 2021.<\/p>\n

The announcement unnerved markets and prompted criticism from European commission officials but the\u00a0Five Star Movement<\/a>\u00a0leader, Luigi Di Maio, was defiant on Tuesday, pledging not to backtrack \u201cby a millimetre\u201d.<\/p>\n

However, government sources told Reuters on Wednesday the aim now was to reduce the deficit and to no higher than 2.2% of GDP in 2020 and 2% in 2021, and possibly lower. Next year\u2019s target remains 2.4% of GDP, they said.<\/p>\n

The news sent Italian government bond yields down, and overnight the euro gained against the dollar. Italy\u2019s leading stock exchange, Milan\u2019s FTSE MIB, closed up 0.9% after several days of tumbling share prices.<\/p>\n

Speaking at a meeting of Italy\u2019s largest employers\u2019 lobby, the economy minister, Giovanni Tria, confirmed that the fiscal shortfall would be put on a downward path after next year.<\/p>\n

\u201cThe deficit will increase compared with the previous forecast in 2019, but then there will be a gradual reduction in the following years,\u201d he said, without spelling out what the targets would be.<\/p>\n

Earlier, the League leader and deputy prime minister, Matteo Salvini, had indicated the government was changing tack compared with last week\u2019s stance.<\/p>\n

\u201cThe goal [next year] is to get Italians working again and paying taxes as they work and therefore reduce the deficit and debt in the following years,\u201d Salvini said in a broadcast interview.<\/p>\n

The coalition came to power in June promising to slash taxes and boost welfare spending, and says an expansionary budget next year will boost economic growth and thereby curb Italy\u2019s debt \u2013 the largest in\u00a0Europe<\/a>\u00a0after Greece at about 131% of GDP.<\/p>\n

President Sergio Mattarella hopes there will be as little deficit spending as possible, but is not trying to dictate numbers to the government, a source close to the president said on Wednesday.<\/p>\n

Italian media have reported that Mattarella is exerting pressure on the government behind the scenes to keep public finances under control and avoid a head-on collision with the EU.<\/p>\n

\u201cThe majority of the member states will clearly ask and demand that these [EU budget] rules are observed,\u201d Austrian finance minister Hartwig L\u00f6ger, whose country holds the rotating EU presidency, said on Tuesday.<\/p>\n

Italy<\/a>\u00a0had previously pledged to Brussels that next year it would reduce its structural deficit, which is adjusted for the economic cycle and excludes one-off factors.<\/p>\n","protected":false},"excerpt":{"rendered":"

Italy\u2019s populist government will cut its budget deficit targets from 2020, after investors sold off Italian assets and\u00a0European Union\u00a0ministers criticised its plans to jack up spending next year. The ruling coalition last week said it\u00a0planned to run a deficit\u00a0of 2.4% of gross domestic product (GDP) next year, tripling the previous government\u2019s target. It also said that the deficit would stay… Read more »<\/a><\/p>\n","protected":false},"author":75,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[77],"class_list":["post-2303","post","type-post","status-publish","format-standard","hentry","category-article","tag-the-guardian"],"_links":{"self":[{"href":"https:\/\/baileyonlineclassroom.com\/europeandrussiablog\/wp-json\/wp\/v2\/posts\/2303","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/baileyonlineclassroom.com\/europeandrussiablog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/baileyonlineclassroom.com\/europeandrussiablog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/europeandrussiablog\/wp-json\/wp\/v2\/users\/75"}],"replies":[{"embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/europeandrussiablog\/wp-json\/wp\/v2\/comments?post=2303"}],"version-history":[{"count":1,"href":"https:\/\/baileyonlineclassroom.com\/europeandrussiablog\/wp-json\/wp\/v2\/posts\/2303\/revisions"}],"predecessor-version":[{"id":2304,"href":"https:\/\/baileyonlineclassroom.com\/europeandrussiablog\/wp-json\/wp\/v2\/posts\/2303\/revisions\/2304"}],"wp:attachment":[{"href":"https:\/\/baileyonlineclassroom.com\/europeandrussiablog\/wp-json\/wp\/v2\/media?parent=2303"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/europeandrussiablog\/wp-json\/wp\/v2\/categories?post=2303"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/europeandrussiablog\/wp-json\/wp\/v2\/tags?post=2303"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}