Start Europe Italy had long been aiming for a new debt of 2.4 percent...

Italy had long been aiming for a new debt of 2.4 percent of economic output for the coming year

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In the budget dispute with the EU, Italy has proposed a reduction of the deficit to 2.04 per cent of gross domestic product (GDP) in the coming year – thereby responding to EU demands. At least a bit …

This was announced by head of government Giuseppe Conte on Wednesday in Brussels. The populist five-star movement and the xenophobic Lega party, which has been in office since June, originally planned a higher budget deficit in 2019.
Following a meeting with European Commission chief Jean-Claude Juncker in Brussels, Conte said that the government had „regained some financial resources“. These resources would now be used for negotiations with the Commission.

A Commission spokeswoman said Juncker and Conte had a „good progress“ meeting. The proposals would now be evaluated. The work will continue in the coming days.

▶ ︎ The new debt would have been three times as high as promised by the previous government to Brussels. But because the eurozone’s third largest economy is already heavily indebted, the EU Commission vehemently opposed it.

The purpose of the draft budget presented last week was to prevent an excessive deficit procedure against Italy. Conte had already announced that the new Italian proposal would lead to the EU Commission „not having to consider such a procedure“.

On 21 November, the European Commission prepared a deficit procedure for the controversial Italian budget for 2019, which was explained by rising debt.

The process could lead to billions in fines for Rome or the removal of EU aid.