Italian Economy Minister Giovanni Tria defended the country’s budget plan in a parliamentary commission today. He emphasized the the targets in the plan are “prudent”. Also, with the plan, Italy will “significantly reduce, within the first two years of this legislature, the growth gap with the Eurozone and bring about the first significant decrease in the debt ratio over the next three years.”
Tria expected the plan to cut taxes and raise welfare spending to boost growth to 1.5% in 2019, 1.6% in 2020 and 1.4% in 2021. And with growth back to pre-crisis levels, Italy’s structural deficit full because of that. Under the plan, the overall budget deficit will be 2.4% in 2019, 2.1% in 2020 and 1.8% in 2021.
Tria also told lawmakers that “a constructive dialogue with the EU Commission will start, and will look at the reasonable contents of what is contained in the budget”.
Whether Tria is overly optimistic is debatable. But financial markets have clearly casts they no-confidence vote. Italian 10 year yield is on the rise again today and breaks 3.7% handle.
