Italy Calls for Dialogue With EU, Promising to Contain Deficit

(Bloomberg) -- Italy’s populist government promised it’s ready to act to ensure its 2019 budget deficit doesn’t exceed its 2.4 percent target and called for dialogue with the European Union to address their differences.

In a letter to the European Commission published Monday, Finance Minister Giovanni Tria said he’s aware that his spending plans don’t comply with EU rules and he wants "constructive" talks on the issue with officials in Brussels.

Tria has come under fire from officials and investors since bowing to pressure from Italy’s coalition heavyweights Matteo Salvini and Luigi Di Maio to allocate resources to their key election promises: tax cuts, more benefits spending, and a lower retirement age. The Commission expressed “serious concern” about Italy’s budget plans in a letter on Thursday.

Tria offered no indication that Italy plans to back down from its headline spending targets, paving the way for the EU to take the unprecedented step of demanding revisions.

©2018 Bloomberg L.P.