Italy budget will include basic income, lower retirement: Tria

ROME: Economy Minister Giovanni Tria said yesterday Italy’s 2019 budget would include a basic income for the poor and allow people to retire earlier, meeting demands from the ruling coalition parties. Tria told a retail association conference the so-called “citizens’ income” would help manage the social consequences of technological change, and said allowing people to retire earlier would give firms a younger, more skilled workforce.

The anti-establishment 5-Star Movement, which governs with the right-wing League, threatened on Tuesday not to vote for the budget unless it included the citizens’ income and a lower retirement age, along with other measures. Today the government will present its economic and financial targets that underpin the budget, which must be approved by the cabinet and presented to Brussels in mid-October.

Financial markets are banking on Tria,

a former academic who is not affiliated to either party, to keep a lid on public finances and to water down some of the big-spending plans of the coalition that took office in June.

Italy’s public debt, at around 131 percent of national output, is the highest in the euro zone after Greece’s. In his speech Tria tried to strike a balance between promising a growth-friendly, expansionary package while maintaining the confidence of markets and avoiding a head-on clash with the European Commission.

“We are working on a mix of policies that show everyone they should have confidence in Italy, not only in our public finances but in our economic growth,” he said.

More investment

Italy has been the most sluggish economy in the euro zone since the start of monetary union almost two decades ago and the number of people living in poverty has tripled in the last 10 years.

The budget will raise public investments to 3 percent of GDP within three years, Tria said, from about 2 percent in 2017. The updated targets will “send a message to markets on the sustainability of our debt,” he said, adding that the budget would aim to halve the growth gap between Italy and the rest of the EU next year. —Reuters