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BUDGET

Salvini vows not to yield to Brussels in Italy budget dispute

Italy's Deputy Prime Minister Matteo Salvini vowed Saturday not to back down in a dispute with Brussels over the country's budget as Rome scrambles to avoid EU punishment for failing to reduce its heavy public debt load.

Salvini vows not to yield to Brussels in Italy budget dispute
Matteo Salvini at a press conference following last week's European elections. Photo: AFP

The EU infuriated Rome this week by warning over its soaring debt, rekindling a process that could eventually see Italy hit with sanctions for breaking spending promises to the EU.

“Next week I will tell Brussels 'let us do what Italians request: fewer taxes and more jobs',” Salvini said during a political rally.

“And if they say 'no', we'll see who is more stubborn,” he added.

The country's public debt stands at 132.2 percent of GDP in 2018.

This is well above the 60 percent threshold set by European rules and next week the European Commission is expected to recommend opening an “excessive deficit procedure” as punishment.

Italy's populist coalition — Salvini's far-right League and the anti-establishment Five Star Movement (M5S) — told the commission late Friday it will review both the country's tax system and public spending.

“The government is setting up a comprehensive program to review the current spending” ahead of the budget law for 2020, Finance Minister Giovanni Tria said in a reply to Brussel's request for an explanation over Italy's finances.

The government will also review Italy's revenue, including taxes, Tria said.

The opening of the EU procedure, which needs to be validated by EU finance ministers, could result in financial sanctions of up to 0.2 percent of Italian GDP, equivalent to three billion euros.

READ ALSO: The biggest winners and losers in Italy's EU election results

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ECONOMY

Sweden boosts spending on civil defence in spring budget

Sweden is to channel a further 800 million kronor to local government and other organisations to bolster Sweden's civil defence capabilities, the country's finance minister has announced.

Sweden boosts spending on civil defence in spring budget

The new funding, which will go to municipalities, regional government, and other organisations, was announced of part of the country’s spring budget, announced on Tuesday. 

“This will strengthen our ability to resist in both war and peace,” Sweden’s finance minister, Mikael Damberg, said in a press conference. “If the worst happens, it’s important that there is physical protection for the population.” 

The government is channelling 91m kronor towards renovating Sweden’s 65,000 bomb shelters, and will also fund the repair the country’s network of emergency sirens, known as Hesa Fredrik, or Hoarse Fredrik, many of which are currently out of order. 

A bomb shelter in Stockholm. Sweden’s government is spending 800m kronor in its spring budget to boost civil defence. Photo: Anders Wiklund/ TT

Sweden’s Social Democrats are currently ruling on the alternative budget put together by the right-wing opposition, making this spring budget, which makes changes to the autumn budget, unusually important. 

The budget includes extra spending of some 31.4 billion kronor (€299m), with 500m kronor going to extra spending on healthcare,  and 10.3 billion kronor going towards supporting Ukrainian refugees, of which nine billion will come from the aid budget. 

The spring budget also includes the so called “pension guarantee bonus”, or garantitillägg, which will see four billion kronor (€390m) going to those with the lowest pensions. 

The bonus, which was the price the Left Party demanded for letting Magdalena Andersson take her place as prime minister, risks being voted down by the right-wing parties in the parliament. 

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