June 1, 2017 / 10:19 AM / 3 months ago

Italy asks EU to approve sharply lower deficit reduction in 2018

ROME, June 1 (Reuters) - Italy wants to reduce its structural budget deficit by 0.3 percent of GDP next year, its economy minister said in a letter published on Thursday, sharply cutting a previous commitment.

Economy Minister Pier Carlo Padoan asked European Commission Vice President Valdis Dombrovskis and Economics Commissioner Pierre Moscovici to approve the target in a letter dated May 30, which the Treasury posted on its website.

The Treasury said in its financial plan in April it aimed to cut the structural deficit, which excludes one-off items and the effects of the business cycle, by 0.8 percent of output in 2018.

Under European law, each country should reduce its structural deficit by 0.5 percent of gross domestic product each year until it reaches balance or surplus, but Brussels had agreed to let Italy shave off just 0.2 percent in 2017. (Reporting by Giuseppe Fonte; Writing by Isla Binnie)

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