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Tuesday 20th March 2018

Tension in Italy Over Budget Spending

Business

Mohamed Zerari - 7Dnews London - AFP

Wed, 26 Sep 2018 19:14 GMT

Italian Deputy Prime Minister, demands from Luigi Di Maio, one of the most prominent figures in the government, to set an "ambitious" budget on the eve of the finance bill for next year, reports AFP.

"We trust (Minister of Economy and Finance Giovanni) Treya, but all citizens are aware that within the Ministry of Economy, people are pushing in the opposite direction," de Mayo told Radio Capital. 

Di Maio's five-star movement calls for "citizenship income," a gross income for the poorest, one of the biggest promises of the campaign. 

Di Maio, gathered other ministers from a five-star movement and Italian media, citing indirect sources, said he was outraged by the threat not to vote on the next budget if it did not include citizenship income. 

"This is not a threat, but it goes without saying that a five-star movement will vote on a courageous budget," he said on Wednesday. 

A few hours later, Treya confirmed that this income would be included in the Finance Act "to help deal with the social consequences of productive transformation." 

The cost of this basic income of about 780 euros per month per person on public finances will be about 10 billion euros according to the movement of five stars, or more, according to other estimates.

For its part, the extreme right-wing "League" party calls for a "fixed tax", a tax on income for individuals and companies, which sets a limit of 15 to 20 percent. 

The two political forces are also tightening their retirement age by allowing the retirement of 62-year-olds and contributing 38 percent of the retirement fund. 

The total cost of these measures is several tens of billions of euros. 

"We are well aware of the financial balance and the need to arrange public accounts, but we can not only pay attention to numbers, we must first meet the demands of the citizens," Di Maio said, pointing out that a general deficit of 2% of GDP is not "taboo". 

The deputy prime minister, who also holds the economic development portfolio, said a debate was going on within the government "about 1.6 percent" of the deficit. 

The Finance Ministry is calling for a deficit of 1.6 percent to be approved by European institutions and reassuring financial markets, which fear a new fiscal meltdown in the country, which has the second highest debt-to-GDP ratio in the euro area after Greece. 


Europe