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Uncertainty around the Italian budget increased once again this week as, despite huge pressure from the EU and third parties such as the IMF, the Italian cabinet approved the draft budget which includes plans to massively increase spending next year, taking the country’s budget deficit up to 2.4% of GDP.
Italy To Renege On Promise of 1.8% GDP Deficit Target
While this level is within the European Commission’s 3% upper limit, it is far higher than the initial promise of a 1.8% GDP deficit that the government made originally. Furthermore, the government’s plans to increase spending stands contrary to EU which state that countries with high levels of indebtedness should focus on balancing their budget.
The 2019 budget plans of the coalition include raising welfare spending, reducing some taxes, scaling back the unpopular pension reforms activated in 2011 which raised the retirement age.
Government “Extremely Happy” With Budget
Speaking at a press conference on M...
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