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Italy Unblocks $1.7 Billion in Funds After Savings Target Met

Italy Unblocks $1.7 Billion in Funds After Savings Target Met

(Bloomberg) --

Italy’s finance ministry has unblocked 1.5 billion euros ($1.7 billion) that had been frozen in July to avoid a European Union sanction on debt, an official familiar with the matter said.

The funds have been released after expected savings from two social welfare plans have materialized, the person said, asking not to be named discussing confidential decisions.

Italy’s previous government lowered the retirement age and introduced an income-support program, but the number of beneficiaries has been lower than expected, leaving extra funds in the budget. The decision to unfreeze the funds will have no impact on the 2019 deficit, the person said.

Finance Minister Roberto Gualtieri announced a deficit target for this year of 2.2% of gross domestic product, which would be higher than the 2% goal originally agreed with the EU.

The unblocking of the funds was decided at a cabinet meeting in Rome on Thursday afternoon but the decision hasn’t been announced publicly yet.

To contact the reporter on this story: Alessandro Speciale in Rome at aspeciale@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Dan Liefgreen

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