Late last night Italy took a stance for sovereignty by passing plans to target a budget deficit of 2.4 per cent of GDP for the next three years. Rome’s budget pushes back the eurozone’s austerity rules and sets them up for a confrontation with the European Union, Voice of Europe reports.
News of the passed budget sent the euro into a free fall as it dropped 0.8 per cent against the US dollar yesterday. It has risen slightly, 0.1 per cent to 1.1650, today but it still remains low.
Italy’s budget deficit will be used to increase public spending, which is in disagreement with economy minister Giovanni Tria.
Threats that things won’t be “pretty” for Italy, or that things will be tough on them have been stated by several ‘experts’ in response to Italy’s step toward sovereignty, Voice of Europe reports.
In a joint statement after meetings with Tria, Mr. Salvini and Luigi Di Maio, coalition partner leaders of the Five Star Movement (5SM), said: “There is an accord within the whole government for 2.4 per cent, we are satisfied, this is a budget for change.”
Afterwards, Mr. Di Maio added: “Today Italy has changed, we have drafted a budget for the people. This 2.4 per cent is a victory for Italian citizens. This budget will allow the economy to grow and investments to rise again.”
Mr. Salvini, from his trip to Tunisia, said: “The right to work, to happiness of millions of Italian people is worth a few little numbers.”
The 2.4 per cent budget does not go over the EU’s deficit limit of three per cent of GDP, however, it is doubtful the EU ‘bosses’ will be in approval of it. Last month, Economic and Monetary Affairs Commissioner, Pierre Moscovici, said: “It’s in Italy’s interest to control public debt.”
Mr. Tria was not in agreement with the figure, wanting to keep it much lower at 1.6 per cent. It will bankroll measures including basic income for job seekers, a €780 per month minimum pension, and an income tax cut for one million workers. It is likely to cost €20 billion over three years.
It has been said that this has created the perception that Mr. Tria has caved under pressure from populist politicians. A spokesman for Tria responded late yesterday to say “he’s remaining in his post”.
Prime Minister Giuseppe Conte wrote on Facebook that the budget goals were “considered, reasonable and courageous” and would “ensure more robust economic growth and significant social progress for our country.”
His Facebook post says the budget plan included “the biggest programme of public investments ever carried out in Italy.”