Italy approves deficit-hiking budget, awaits EU's verdict

Italy approves deficit-hiking budget, awaits EU's verdict

Italian Prime Minister Giuseppe Conte warned Wednesday that Rome would not change a government budget for 2019 that defies European Union rules, putting Rome on a collision course with Brussels. The Italian government's growth forecasts may be seen as overly optimistic, meaning its deficit and debt may ultimately be even higher than planned. "Europe needs Italy and Italy needs Europe", Juncker said, answering "No" when asked if Europe could survive an Italian exit.

"Of course, Italian public finances we cause a lot of hassle, but we do not have prejudices", was assured on Tuesday the president of the eu executive Jean-Claude Juncker in an interview with several television and radio stations in italy.

Brussels is concerned that Italy's budget will increase the country's deficit. "That said, the French budget does not breach the expenditure benchmark rule; moreover, France can justify its deviation from the structural adjustment path on the basis of the structural reforms it is implementing". "Investment in Italy, as a percentage of GDP, in the last few years has been below European Union average and has not really picked up from the crisis", he told CNBC's "Capital Connection". "Your votes give me strength to go to Brussels and say it's the Italians that decide, not them". This in turn, could bring back to the fore the aggressively eurosceptic stance of the coalition, which was moderated when it took to power.

The Commission says the budget will push up Italy's public debt which stood at 131 percent of GDP a year ago, the highest in the euro zone after Greece's.

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Its public release also included several memes and other images from the tweets . It comes less than one month before U.S.

In May, a leaked report, published in part by the Huffington Post, showed that both parties discussed a commitment to leave the euro prior to entering into government, before abandoning that pledge.

He hit out at Brussels for its sanctions policy against Moscow and claimed Italian businesses had lost billions of euros as a result of the measures. Officials sought to play down the chances of a major clash, with Giovanni Tria, Italy's foreign minister saying that the "idea that this budget will blow up Europe is totally unfounded". One of the key forecasts in the budget is that Italy's high debt to GDP ratio, of around 130 percent now, will decline to 126.7 percent of GDP in 2021.

Bond markets have also responded strongly to the crisis, with the yield on the 10-year Italian bond rising above 3.6% last week, its highest level in four years.

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