Italy budget: Parliament passes budget after EU standoff

Even while the opposition in Italy complained that the Italian government was being dictated by the European Union, the parliament of the country approved a revised budget for 2019.

Earlier, the populist government of the country had actually pushed hard to implement some of its campaign promises which are costly for the country’s budget and included implementation of a universal basic income.

However that budget proposal by the Italian government was objected up[on and rejected by the European Commission in October over concerns of the impact that such high levels of spending would have on the debt levels of the country.

The Italian government was asked to revise the budget and keep the budget deficit within the mandatory norms of the Commission for its member states. The Commission also warned that Italy would face fines and disciplinary action if the revision was not done.

The planned budget deficit was reduced from 2.4 per cent of GDP to 2.04 per cent according to a deal that the Italian government struck with the Commission last week. That budget deficit was what was being demanded by the Commission.

A little more than €10bn (£9bn) is anticipated to be the value of the concessions.

The budget was approved by the Senate last week and on Saturday, the revised proposals were passed by the lower house of in a confidence vote with 327 votes in favour, 228 against, and one abstention.

Parliament was unable to debate the altered proposals because of the last minute deal of the Italian government with the Commission, alleged opposition lawmakers.

The supporters of the centre-left Democratic Party held a protest outside parliament and the party filed a complaint with Italy’s Constitutional Court.

The Italian government was facing the ultimatum of being forced to continue with the 2018 budget on a monthly basis after De3cember 31 which was the deadline for passing the budget.

A number of pledges have been made by Italy’s coalition government which is composed of the anti-establishment Five Star Movement and right-wing League.

It includes payment of €780 ($890; £700) a month to 1.7 million of Italy’s poorest families of the country under a new income support scheme known as the “citizens’ wage”. This scheme is expected to cost the government €7.1bn.

For those workers who have paid into the pension system for 38 years, the age of retirement would be reduced from the current age of 67 years to 62 years. Income taxes would be reduced to 15 per cent for more than a million self-employed workers earning under €65,000 a year.

The budget was hailed as “the first step of a broad and ambitious plan of reform” by Prime Minister Giuseppe Conte. He said that the budget would “turn Italy inside out like a sock” and would also kick-start growth in the economy. However, the plan does not create investment incentives argue critics.

(Adapted from BBC.com)

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Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Uncategorized

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