Italy on Monday, like all other eurozone countries, submitted its draft budget to the Commission for approval, after the country’s lawmakers voted for it in a late parliamentary session.
Italy’s budget plans for next year will lower the retirement age and introduce ‘minimum wage’ payments to poor Italians starting from next year
The submission of the draft to the European Commission for review is expected to be the first step in potentially fraught negotiations with Brussels over the Italian coalition’s plan to increase spending.
The measures will take the budget deficit to 2.4 % of GDP – well below the EU limit of 3%, but 3 times higher than the target of 0.8 % agreed between the previous Italian government and the EU.
Matteo Salvini, leader of the hard-right League party, which shares power with the anti-establishment Five Star Movement, said the budget plans would “open up job opportunities for hundreds of thousands of young people”.
The commission can demand revisions to the Italy’s budget plan, a step it has not taken before and which could put it on a collision course with Italy’s coalition government.
Last week, Poul Thomsen, IMF’s top official on Europe warned Italy’s government over its budget plans, arguing the government should take greater steps to cut public debt, which is the second largest in the eurozone as a proportion of GDP after Greece.
European Commission President Jean-Claude Juncker went as far as to suggest that the Italian budget may lead to similar debt crisis faced by Greece.
Meanwhile, in a speech to small business owners in northern Italy earlier on Monday, Mr Salvini said he would ignore any attempts by Brussels to block the government’s spending plans. “I am tired of Italians being treated like bums on all fronts,” he said. “If Brussels says you cannot do it I will do it anyway. It is my responsibility to make decisions.”