(Bloomberg) -- Claudio Borghi, the head of Italy’s lower house budget committee, said the country’s deficit will be around 2% this year, less than previously forecast.
If the European Union "will look at the numbers as they are, it will conclude that deficit was much lower than it was feared to be, and one of the lowest in Europe," Borghi said in an interview on Bloomberg TV on Tuesday. His comments echoed Finance Minister Giovanni Tria who said earlier in the day that he was “optimistic” an EU censure could be averted.
"We are doing much better than what was forecast, because we are collecting much more tax, we are spending less” than expected on earlier retirement and income support for the poor, said Borghi, a close ally of League leader Matteo Salvini and one of the populist coalition’s leading euroskeptics.
Italy and the EU have been clashing since the populist government took power over fiscal targets, with Rome arguing that it needs to reduce its deficit slowly to avoid harming the economy and Brussels requesting swift action to reduce the nation’s debt load, the second-biggest in the euro area after Greece.
Tria, who is leading efforts by Prime Minister Giuseppe Conte’s government to avoid a European Union penalty over this year’s budget, said he doesn’t see “obstacles to an agreement.”
“Italy is substantially compliant with the European fiscal rules,” Tria said. “For the future, the idea is to keep the deficit low and continue in the objective of decreasing debt.”
Earlier this month, both Tria and Conte said a deficit target of 2.1 percent of output this year is reachable amid lower spending and higher-than-expected revenue.
Italy has won an extra week to get its act together and avert an infringement procedure by the European Union, according to an EU official who spoke speaking on condition of anonymity because discussions are private.
The official warned that what Italy has offered so far isn’t enough to stop Brussels from starting a so-called excessive deficit procedure, something that would most likely happen on July 2.
"If ever there is a real intention to look at the numbers, there is no reason to fear," Borghi said.
©2019 Bloomberg L.P.
RECOMMENDED FOR YOU
POPULAR