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Italy's parliament approves 2019 budget in confidence vote

Italy's parliament approves 2019 budget in confidence vote
Copyright REUTERS/Remo Casilli
Copyright REUTERS/Remo Casilli
By Darin GrahamReuters
Published on Updated
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The Italian parliament passed the government's 2019 budget following last week's deal with the European Union, averting sanctions and fines on Rome.


The Italian parliament approved the government's 2019 budget following last week's deal with the European Union, averting sanctions and fines on Rome.

The re-drafted budget, agreed with the European Commission, cut the deficit for 2019 to 2.04% gross domestic product after Brussels rejected its original proposal of 2.4%, saying it broke fiscal rules.

The win by the government with 327 yes votes to 228 no's followed a three month battle with Brussels over the proposals.

The country was under pressure to pass it by December 31 or risk sanctions for excessive debt.

Opposed lawmakers in the Italian parliament complained the last-minute deal meant they had no time to access the amended measures properly.

The re-draft lowers the budget deficit by adding new taxes, such as those on web-based businesses and schemes to drum up revenue, like selling government properties.

Conte said on Saturday the budget was the "first step of a broad and ambitious plan of reform" which would "turn Italy inside out like a sock" and boost its slow economic growth.

As part of a deal with the EU, the government lowered its GDP growth forecast for next year to 1% from a previous projection of 1.5%, widely considered unrealistic.

The country's public debt, which is the highest in the euro zone after Greece's, is now targeted to fall marginally in 2019 by 1%.

And on Friday, scuffles between MPs lead to talks being suspended by the president of the lower chamber.

“You are asking for a motion of confidence on a measure which parliament has not had time to discuss,” said Graziano Delrio, a former minister with the center-left Democratic Party. “You have prevented a sacrosanct procedure guaranteed by the constitution.”

Prime Minister Giuseppe Conte denied Italy's new budget was dictated by the European Commission, saying he remained unyielding on the inclusion of points like a basic job-seekers' allowance.

In June, two parties formed a coalition government in Italy, the 5-Star movement and the League.

During the election campaign, both promised lower taxes, a minimum basic income an early retirement scheme.

But when it came to submitting the draft budget for 2019, the government ran into trouble with the EU over its projections.


The European Commission, the EU's legislative arm, wanted Italy to respect fiscal rules, reduce public debt and set a budget deficit of 1.8% of GDP.

The budgets flagship policies are the new "citizens wage" (an income support scheme), tax cuts for the self-employed and higher taxes on banks, insurers and gambling companies.

A few hundred supporters of the centre-left Democratic Party protested outside parliament during Saturday's debate.

A final vote on the budget will be held in the chamber on Saturday or Sunday and the president will sign it off, but this is considered no more than a formality.

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