Racing Against Time, Conte Downplays the Risk of Debt in Italy’s Budget

Last updated on January 2nd, 2019

Italy’s populist government is racing against time to push its budget bill through Parliament, with a controversial tax increase for charities – a move expected to trigger chaos in the Parliament as the deadline draws closer.

The resolution if passed will double the tax rate for nonprofit entities such as the Red Cross, to 24 percent. Besides, the agenda set out by the populist government, said that it would introduce reforms against poverty in the nation. However, the European Union (EU) slammed its idea as it cut down the deficit spending budget from 2.4% to 2.04%.

Given the December 31 deadline to get the budget package approved in Parliament, Italian Deputy Prime Minister, Luigi Di Maio, said there is not enough time to amend the tax proposal now. Therefore, the “norm will have to change at first available opportunity” in current month of January.

Prime Minister of Italy, Giuseppe Conte, however, scrapped off the risks associated with Italy’s huge level of debt, reinstating confidence in his coalition government’s controversial economic policies.

Debt “must be kept under surveillance, but it isn’t so scary,” Conte said at his year-end press conference in Rome on Friday. He added, “Italy’s economic fundamentals are very solid.” Besides, Rome has also blamed the EU as one of the major reasons why there is a significant delay in passing its budget bill through the Parliament. Italy’s debt is 130% more than its GDP, the second-highest ratio in Europe after Greece.

The final vote on the bill was held on Saturday, winning Italy’s populist government a key vote in the lower house of parliament. The Italian parliament passed the 2019 budget while Italy was striving to achieve its year-end deadline.

About seven months after being in power, the populist government has remained popular as the two ruling parties have the support of around 60 percent of Italians, as per opinion polls. Another final vote is yet to take place in order to completely certify the passage of the budget. However, considering the situation at hand, it would be nothing more than formality.

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