‘A lot to cut’

Ital­ian pop­ulist leader ‘guar­an­tees’ na­tion won’t exit euro


The head of one of Italy’s rul­ing par­ties in­sisted Fri­day that the coun­try won’t exit the euro cur­rency bloc nor ex­ceed its tar­geted deficit limit, dis­miss­ing the Eu­ro­pean Union’s wor­ries about the pop­ulist gov­ern­ment’s bud­get strat­egy.

Deputy Pre­mier Luigi Di Maio, who heads the main party in the five-month old coali­tion, told for­eign cor­re­spon­dents in Rome that he “guar­an­tees” that do­mes­tic spend­ing cuts plus eco­nomic growth spurred by pub­lic in­vest­ment will keep the coun­try from over­shoot­ing its deficit tar­get for next year, as EU of­fi­cials fear.

“There’s still a lot to cut,” Di Maio said. “The guar­an­tee we’re giv­ing is that 2.4 per cent (of GDP) is the max­i­mum deficit term” Italy will run up next year.

He brushed off con­cern that Italy might in­cur EU sanc­tions if it sticks to its deficit tar­get.

Mean­while, the head of the 19-mem­ber eu­ro­zone’s fi­nance meet­ings sidestepped ques­tions on whether Italy might be hit with a EU fine.

“One thing at a time,” said Mario Cen­teno, Por­tu­gal’s fi­nance min­is­ter who heads the so-called eu­rogroup and had just emerged from talks in Rome with Italy’s econ­omy min­is­ter, Gio­vanni Tria. Cen­teno pre­ferred to speak of an over­ar­ch­ing con­cern in Brus­sels.

“Be­yond the rules, sus­tain­abil­ity is the heart of the dis­cus­sion,” Cen­teno told re­porters.

Tria gave no in­di­ca­tion Italy would budge on its bud­get plans to please the EU.

Flank­ing Cen­teno, Tria said that if avoid­ing sanc­tions were the goal, “we would have to make a very vi­o­lent bud­get ma­noeu­vre of fis­cal re­stric­tion.” That, he ar­gued, “would be sui­cide for an econ­omy in marked slow­down.”

Italy’s eco­nomic growth has been sub-par for years.

There are doubts within Italy, too, about whether the gov­ern­ment can achieve its eco­nomic growth goals with its pro­posed bud­get. An Ital­ian cen­tral bank of­fi­cial, deputy di­rec­tor Luigi Fed­erico Sig­norini, told law­mak­ers Fri­day that the gov­ern­ment’s growth fore­casts for next year are “am­bi­tious.”

The EU ex­pects the Ital­ian econ­omy to grow only 1.2 per cent next year, the low­est in the eu­ro­zone. The Ital­ian gov­ern­ment ex­pects a more op­ti­mistic 1.5 per cent growth.


Ital­ian Fi­nance Min­is­ter Gio­vanni Tria, left, and Por­tuguese Econ­omy Min­is­ter and head of the Eu­rogroup Mario Cen­teno hold a press con­fer­ence, in Rome on Fri­day.

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