Euro wasn’t too bothered after Italian government confirmed raising budget deficit, which would put them at odds with the EU. After the highly anticipated cabinet meeting, they decided to target budget deficit at 2.4% of GDP for the next three years. That is, Economy Minister Giovanni Tria, an unaffiliated technocrat, conceded his push for lowering deficit to just 1.6% of GDP, and then 2.0% in 2019.
“There is an accord within the whole government for 2.4 percent, we are satisfied, this is a budget for change,” 5-Star Movement leader Luigi Di Maio and League leader Matteo Salvini, both Deputy Prime Ministers, said in a joint statement after meetings with Tria.
Prime Minister Giuseppe Conte said the budget goals were “considered, reasonable and courageous” and would “ensure more robust economic growth and significant social progress for our country.” He added the budget plan included “the biggest program of public investments ever carried out in Italy.”
While the 2.4% deficit target remains below EU rule of 3.0%, EU might find a lack of commitment on Italy’s side to cut its massive debt.
Euro is trading mixed for the day and the week.
