Italian PM to EU: 'No room' for modifications on budget

pulse

October 17, 2018 6:56 PM

Italian Prime Minister Giuseppe Conte warned Wednesday that Rome would not change a government budget for 2019 that defies EU rules, putting Rome on a collision course with Brussels.

"Room (for changes), I would say there is none," Conte told reporters as he arrived for a two-day European Union summit in the Belgian capital dominated by Brexit, but where the state of Italy's finances is also a concern.

EU leaders are set to discuss the eurozone on Thursday, with harder line leaders -- most notably from the Netherlands -- expected to denounce Italy's decision to go on a public spending spree.

On the sidelines of the summit, Conte met Chancellor Angela Merkel of Germany, where criticism of Rome's populist government also runs high.

"I will send the message that we have a well-articulated budget, a budget to reverse the trend in the Italian economy," Conte said, before meeting Merkel.

"We want growth, and we want to do it in the interest of the country," he added.

Italy's coalition government submitted its draft 2019 budget to the European Commission on Monday and the EU executive is widely expected to raise its concerns later this week.

The spending boost is essentially due to what the government calls its "people's budget", a series of pension and tax changes that will cost 37 billion euros ($43 billion), of which 22 billion will be paid for by expanding the deficit.

Brussels believes Rome needs to cut the deficit in order to begin reducing its massive debt, which exceeds 130 percent of annual economic output -- way above the EU's 60 percent ceiling.

The brash attitude of Italy's anti-establishment government towards public spending has spooked the markets, with many fearing a re-run of the debt crisis that nearly saw Greece kicked out of the eurozone.

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