Italy PM defends budget as tempers fray in parliament

Italy PM defends budget as tempers fray in parliament
FILE PHOTO: Italian Prime Minister Giuseppe Conte speaks during his end-of-year news conference in Rome, Italy, December 28, 2018. REUTERS/Alessandro Bianchi Copyright ALESSANDRO BIANCHI(Reuters)
By Reuters
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By Gavin Jones

ROME (Reuters) - Italian Prime Minister Giuseppe Conte on Friday vigorously defended the government's 2019 budget as parliament held an acrimonious debate on the package, which needs to be approved by the end of the year to take effect on Jan. 1.

An amended budget was presented to the Chamber of Deputies on Thursday after the government reached a last-minute deal with the European Commission to avoid a disciplinary procedure against Rome that could have led to fines.

Opposition lawmakers said they had no time to discuss the package, and the sitting was suspended after a deputy from the centre-left Democratic Party (PD) hurled the budget documents at a junior minister.

Speaking at the prime minister's year-end news conference, Conte acknowledged that parliament's role had been diminished, but said the deal with Brussels was "a great result which will benefit the whole country."

Italy last week re-drafted the budget and lowered its deficit goal for next year to 2.04 percent of gross domestic product after the Commission rejected its original target of 2.4 percent, saying it broke EU fiscal rules.

Conte called the budget "the first step of a broad and ambitious plan of reform" which would "turn Italy inside out like a sock," and finally boost its chronically sluggish economic growth.

The government is expected to call a confidence vote in the Chamber to approve the budget on Saturday or Sunday, in time to avoid emergency provisional financing kicking in after the end of the year.

The PD on Friday lodged an appeal with the Constitutional Court, saying its democratic rights had been trampled on because there had been no time for parliament to debate or amend the package following the changes agreed with Brussels.

Italian financial markets have welcomed the end of hostilities with the Commission, and Italian benchmark bond yields hit a three-and-a-half month low on Friday after a successful debt auction.

Conte, 54, leads a coalition of the anti-establishment 5-Star Movement and the right-wing League, former rivals which formed a government in June following an inconclusive March election. He is close to 5-Star but is not a member of either party.

The formerly unknown lawyer is now Italy's most popular active politician, according to many opinion polls. But he said on Friday he would not seek re-election at the end of the government's 5-year term of office.

He called the coalition "a perfect amalgam" despite reports of internal tensions, and set out an ambitious agenda of tax cuts, bureaucratic simplification and infrastructure investments.

(Reporting by Gavin Jones; Additional reporting by Valentina Za; Editing by Hugh Lawson)

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