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Italy holds budget meeting Monday as Treasury targets 1.6 percent deficit - report

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Italy holds budget meeting Monday as Treasury targets 1.6 percent deficit - report
FILE PHOTO: Italian Economy Minister Giovanni Tria attends as Prime Minister Giuseppe Conte (unseen) speaks during his first session at the Lower House of the Parliament in Rome, Italy, June 6, 2018. REUTERS/Tony Gentile/File Photo   -   Copyright  Tony Gentile(Reuters)
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MILAN (Reuters) – Italy’s economy minister is set on preventing the 2019 budget deficit from rising above 1.6 percent of domestic output, an Italian daily reported, adding that a meeting of top ministers on the budget would take place on Monday.

Corriere della Sera daily reported Economy Minister Giovanni Tria would meet Prime Minister Giuseppe Conte and Deputy Prime Ministers Luigi Di Maio and Matteo Salvini to discuss the budget.

Corriere said the goal of the meeting was to start “to pin down some numbers” and decide what funds to allot to the different measures being considered.

Markets are on edge over Italy’s next budget after an anti-establishment coalition rose to power in early June pledging to ramp up public spending and to unwind past deficit-curbing measures.

Corriere said PM Conte was expected not to challenge a 1.6 percent deficit limit while it would be more difficult to appease the two deputy prime ministers.

Corriere calculated Rome needs 10 billion euros in additional revenues or lower spending to hit the 1.6 percent goal.

The figure must rise to 15 billion euros if the government wants to adopt at least some of the measures pledged by the coalition’s parties without endangering the 1.6 percent ceiling.

By 0716 GMT Italy’s benchmark 10-year debt costs stood at 2.91 percent <IT10YT=RR> down from 2.98 percent on Friday, with traders citing Tria’s commitment to keeping the deficit under control.

Tria, an academic with no political affiliation, is seen as the bastion of market discipline against the demands of the far right League and the anti-establishment 5 Star Movement, the two ruling parties.

Italy already has a debt of 132 percent of gross domestic product, the second highest in the euro zone, and feeding that with a high deficit would fuel market concern about its ability to repay.

(Reporting by Valentina Za; Editing by Toby Chopra)

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