Italy’s prime minister to discuss budget deficit with European Council president
Italian PM Giuseppe Conte will meet European Council President Jean-Claude Juncker in Brussels today to discuss Italy’s 2019 budget.
Rome continues to negotiate with the EU over its 2019 budget proposal, which was rejected in October because it disobeyed the bloc’s deficit rules. To meet costly election promises, like a guaranteed income for the poor and a pension-system overhaul, Italy’s government is planning to spend about $9.2 billion more than it is allowed to under EU laws.
To avoid sanctions, Luigi di Maio and Matteo Salvini—the populist power brokers of Italy’s ruling Northern League and Five Star Movement (M5S)—are considering conciliatory spending cuts.
To date, Italy has proposed budgetary cuts of $4.6 billion to meet Brussels half-way. While the government may be able to get away with some spending drawbacks, cuts in the ballpark of $10 billion will hurt public support for the government, which currently stands at about 60%. The M5S will be most impacted by spending cuts; its main voter base is the underdeveloped south of Italy, where promised domestic reform was a pillar of the party’s support.
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