Italy revises deficit targets after EU criticism

Italy's deficit-to-GDP ratio will be set at 2.4% in 2019 to then drop to 2.1% in 2020 and 1.8% in 2021, PM Giuseppe Conte announced after a government budget summit on Wednesday, responding to EU criticism, ANSA reported.

Conte discussed the update of the DEF economic blueprint with the two deputy premiers Luigi Di Maio and Matteo Salvini, Economy Minister Giovanni Tria, Foreign Minister Enzo Moavero and Cabinet Secretary Giancarlo Giorgetti.

After the talks he said the debt-GDP ratio would drop to 126.5% from its current 130.9% by 2021. At the same time he pointed out that the government will not give up the measures in its contract about the basic income, pension overhaul and flat tax.The premier also said they estimated that unemployment would fall to 7% "with these reforms".

The League/5-Star Movement (M5S) government had previously indicated it would run a deficit of 2.4% for the next three years as part of budget plans that have been criticised by the European Commission and have been followed by a big rise in Italy's bond spread.

European Economic Affairs Commissioner Pierre Moscovici reiterated on Wednesday that Italy risks breaking the Stability and Growth Pact if it presses ahead with plans to run a budget deficit of 2.4% of GDP next year. "We have quite precise rules," Moscovici said on the fringes of the Economic Forum of the Americas at the OECD's Paris headquarters.


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