Italian government approves 2017 budget

The Italian Prime Minister Matteo Renzi’s cabinet on Saturday approved the country’s 2017 budget.

Speaking at a press conference in Rome, which was also broadcast live on Facebook, the prime minister said the new measures include clamping down on tax dodging and shutting down certain redundant public sector offices. They will allow the country’s GDP to grow “at least” 1 percent next year, Renzi said.

The budget, worth €26,5 billion includes extra funds for the public heath system, pensions and unemployment benefits. The deficit limit was set at 2,3 percent of GDP, above the 2 percent target previously discussed with Brussels.

Asked by reporters whether Commissioner Pierre Moscovici was aware of the planned increase, finance minister Pier Carlo Padoan said: “We will send the draft to Brussels at the beginning of the week and we will discuss with the Commission the contents of it.”

Padoan also underlined that for quite some time, Italy was the only country to use its own resources to manage the migration crisis. A little leeway on budget, therefore,  should not be seen as “flexibility” but more as Italy’s legitimate right to claim back what it has spent on a crisis, affecting all of Europe.

The package now needs to be approved by parliament and will be reviewed by the European Commission. The Italian government has come under increased pressure from officials in Brussels to contain Italy’s deficit.

At the end of the summer, Renzi asked the EU to allow Italy some “flexibility” in the budget in order to dedicate funds for reconstruction of the region, hit by the devastating earthquake in August.

At the time, the prime minister said the government would not negotiate with the Commission over Italy’s budget law.