Italy’s Di Maio Stands Firm on Reforms Planned in 2019 Budget

(Bloomberg) -- Italy’s government is ready for dialog with the European Commission over the country’s budget plan for next year, yet the EU’s executive arm can’t seek to “massacre Italians” by trimming expenses aimed at boosting growth, Deputy Prime Minister Luigi Di Maio said.

“We are ready to make major cuts on wasteful spending,” Di Maio told daily Corriere della Sera in an interview. “We would also eventually be ready for safeguard clauses that would protect against deficit widening. But the big reforms of this budget law need to remain in place.”

He also repeated the government would agree to some sales of real estate, but “not the family jewels.”

The populist government on Nov. 13 maintained its 2019 goals for a 2.4 percent budget deficit and 1.5 percent growth, after the commission demanded changes due to excessive spending and overly optimistic growth estimates. The commission is now expected to say that Italy’s budget is in breach of European Union fiscal rules when it issues its opinions on euro-area draft budgets on Nov. 21.

Italy’s government coalition is in “no clash” with Europe and is determined to do the opposite of previous governments by making the country grow, increasing employment and putting “money in Italians’ pockets,” the other deputy premier Matteo Salvini said on Stasera Italia Weekend television program on Saturday.

“We have gotten past the years of tears and blood. I am convinced that if they are in good faith in Brussels and let us work, we will be able to comment on the results together.”

Concerns expressed by European Central Bank President Mario Draghi over the widening spread between Italian and German bunds and over the size of Italian debt were “legitimate,” Di Maio said in the interview with Corriere.

Those worries were the reason for Italian officials to seek “another recipe,” he said. “With our recipe we are trying to meet Draghi’s objective: if we manage to lower debt, we’ll also manage to reassure the markets.”

--With assistance from Kevin Costelloe.

To contact the reporters on this story: Maria Ermakova in Milan at mermakova@bloomberg.net;John Follain in Rome at jfollain2@bloomberg.net

To contact the editors responsible for this story: Jerrold Colten at jcolten@bloomberg.net, Paul Jarvis

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