Italy's PM defiant on budget, denies coalition rift
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[October 18, 2018]
By Francesco Guarascio
BRUSSELS (Reuters) - Italy's prime minister
on Thursday denied any division between the two parties in his governing
coalition, after reports of a spat over tax revenues, and insisted Rome
will move ahead with planned expansionary budgetary measures.
His remarks came as European Union leaders raised concerns about Rome's
extravagant budgetary plans that could further increase Italy's public
debt, which, at 133 percent of gross domestic product, is the largest in
the EU after Greece.
In what could be a further source of concern, Deputy Prime Minister
Luigi Di Maio, leader of the 5-Star party, said on Wednesday a
legislative text on a partial tax amnesty had been "manipulated" before
its final approval.
The anti-establishment 5-Star has always opposed amnesties - a
frequently used policy in Italy where people or companies can avoid
being pursued for tax dodging by paying a fee. Its coalition partner,
the far-right League, favors amnesties, which bring money into the
treasury and are popular with voters.
Di Maio did not clarify who could have amended the document.
Asked by reporters about a possible coalition rift, Prime Minister
Giuseppe Conte - who is not from any political party - replied: "There
is no division".
Arriving at the EU summit in Brussels, Conte acknowledged that budget
plans to boost welfare spending, cut the retirement age and hike the
deficit were unlikely to please the European Commission, which polices
euro zone states' fiscal policies.
The Commission says the budget is likely to breach EU fiscal rules and
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Italian Prime Minister Giuseppe Conte arrives at the European Union
leaders summit in Brussels, Belgium October 18, 2018. REUTERS/Piroschka
van de Wouw
"I'm aware this is not the budget the Commission expected. I expect critical
observations. We will discuss and we will reply to these considerations," Conte
On Wednesday Conte said he saw no room for changing tack and on Thursday
described the budget as "beautiful".
(Reporting by Francesco Guarascio; Editing by Robin Pomeroy)
At the summit, Austrian Chancellor Sebastian Kurz said fiscal rules should be
respected by all, adding: "Too much debt is dangerous."
German Chancellor Angela Merkel, at a meeting with Conte on Wednesday, called
for "positive dialogue" between Italy and the EU on the budget [nL8N1WX6VL].
EU leaders may ask Conte about the budget at the summit, although it is not on
In its review of Rome's budgetary plans, the EU Commission can raise concerns
until Monday. It could then decide to send the budget back for changes by Oct.
29, in what would be an unprecedented move that is likely to cause further
Yields on Italian benchmark 10-year bonds spiked after elections in March
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