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Italy 2019 deficit set for 2%, Conte tells Brussels

Italy is back on track on the deficit, Conte says
Italy is back on track on the deficit, Conte says AFP
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Brussels (AFP)

Italy's public deficit is "perfectly on track" to reach 2.04 percent of gross domestic product in 2019, Prime Minister Giuseppe Conte said on Tuesday, a level that would cut short any EU disciplinary procedures.

"We're on track with the forecasts that we've made," Conte told journalists in Brussels.

"You'll remember the famous 2.04 percent for 2019, well we're perfectly on track."

Rome and Brussels had initially agreed on the 2.04-percent figure in December, but the Italian government was forced to raise the forecast to 2.4 percent in March given the deteriorated economic outlook.

The cabinet calculated at a budget meeting late Monday that some 6.24 billion euros ($7.0 billion) of additional revenues would now be coming in this year, while expenditure would rise only by an extra 130 million euros.

Furthermore, a huge chunk of money earmarked for early retirement payments and a citizens' income for the less well-off has been frozen due to lower than expected demand.

So, the overall deficit for this year would be around 7.6 billion euros lower than anticipated, the cabinet said in a statement late Monday.

"The best thing that we tell Italian citizens is that we're not cutting social or other spending, these are additional receipts," Conte said.

"We made prudent estimates for some elements... this is an update to our accounts."

On June 20, Conte had already suggested that Rome would achieve a deficit ratio of 2.1 percent this year, while the EU Commission is pencilling in a figure of 2.5 percent for the bloc's fourth-largest economy.

The Italian finance minister Giovanni Tria has said that the government regarded its budget as "perfectly in line with the rules of the Stability and Growth Pact," under which EU members must consistently reduce their deficits and target a balanced budget in the long term.

"The adopted measures create the conditions which do not justify the initiation of excessive deficit procedures against Italy," the minister said.

At the start of June, Brussels formally put Italy on notice about its deteriorating deficit and snowballing debt and opened an excessive deficit procedure which could result in an unprecedented fine of more than 3.0 billion euros for the country.

The decision has yet to be confirmed by EU member states.

The European Commission in October rejected the big-spending budget submitted for approval by the Italian coalition government of the far-right League and the anti-establishment Five Star Movement.

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