Conte 'not afraid' of EU rejection of govt spending plans

Conte 'not afraid' of EU rejection of govt spending plans

Populist premier Giuseppe Conte said on Friday he was "not afraid" of European Commission censure of Italy's plans to triple the budget deficit target in order to fund a basic income for the poor, tax cuts and pension increases.

"No, I don't fear this," Conte told reporters.

"We worked very intensively over the past week to prepare budget plans that are serious, carefully thought out and courageous: we're confident it is the right recipe for growth and social progress," said Conte.

"Italy is not a problem for Europe, it wants to be a resource," he said.

After the populist government set the budget deficit target at 2.4 percent for 2019 and the following two years - overnight news that roiled markets - EU Economic Commissioner Pierre Moscovici said on Friday Italy would lose out if it flouted the bloc's fiscal rules.

The plans setting the budget deficit at 2.4 percent of GDP will only add to Italy's 2.3 trillion euro debt pile, and every euro spent on servicing such a large debt was "one euro less on roads, one euro less on education and one euro less on social justice," Moscovici said.

The 2.4 percent budget target is well below the EU's deficit limit of 3 percent of GDP but Italy, the third-biggest economy in the eurozone, had pledged to cut its debt decisively. The previous centre-left government was aiming for a 0.8 percent budget deficit with a view to balancing its books by 2020.

The government's deficit targets mark a victory for party chiefs over economy minister Giovanni Tria, a technocrat, who had sought to keep the budget deficit below 2 percent of GDP.

The government's spendings plans need to be submitted to the European Commission by mid-October and must be approved the Italian parliament during the course of the month.