The Italian government has decided to stick to its costly budget plan, defying the European Commission in the process.
The Commission had told Rome to revise the budget or face possible fines, since the high level of spending proposed in Italy’s budget could exacerbate its high levels of debt. It was an unprecedented move with regard to an European Union member state.
Matteo Salvini, one of Italy’s deputy Prime Ministers, said a deficit target of 2.4 per cent and a growth forecast of 1.5 per cent were unchanged, adding in a statement, that the government would stick to the budget's main parameters.
Meanwhile, fellow deputy PM Luigi Di Maio said that this was the budget Italy needed to get going again.
The Italian government has vowed to ‘end poverty’ by introducing a minimum income for the unemployed, adding tax cuts and scrapping extensions to the retirement age, all of which were key campaign promises which helped the coalition win the election in March.
Their reasoning is that an increase in spending would kick-start growth in Italy, whose economy is still smaller than it was before the financial crisis in 2008.