November 25, 2018 / 7:06 PM / 19 days ago

Italy's Salvini hints at tweak to 2019 deficit goal - report

MILAN (Reuters) - Italian Deputy Prime Minister Matteo Salvini hinted on Sunday at the possibility of tweaking the country’s deficit goal for next year, a move that could open a negotiation between Rome and Brussels to avoid a disciplinary procedure against Italy.

FILE PHOTO: Italy's Minister of Labor and Industry Luigi Di Maio, Prime Minister Giuseppe Conte and Interior Minister Matteo Salvini leave at the end of a news conference after a cabinet meeting at Chigi Palace in Rome, Italy, October 20 2018. REUTERS/Remo Casilli/File Photo

“I think no one is stuck to it,” Salvini said when asked whether the target of 2.4 percent of GDP for the Italian public deficit was untouchable, Italian newswire Adnkronos reported on its website.

“If there is a budget plan that makes the country grow, (the deficit) could be 2.2 or 2.6 percent ... the decimals are not the problem, the problem is to be serious and concrete,” added Salvini, who is also the head of the League party.

A source from the 5-Star Movement, which is in coalition with the League, said the government wanted to avoid a tug-of-war with the Commission and would defend “the citizens and not the figures”.

Rome risks being put under a disciplinary procedure by European partners after it presented an expansionary 2019 budget, revising up fiscal targets compared with goals agreed by the previous government.

The Italian government wants to increase borrowing next year to deliver on election promises of lowering the pension age, providing a universal income and some tax cuts. It says higher consumption will accelerate economic growth — an assumption the European Commission does not share.

The Commission took the first step last Wednesday toward disciplining Italy over its budget after Rome refused to change it, raising the stakes in a dispute that has alarmed the whole euro zone and could eventually lead to fines.

Commission President Jean-Claude Juncker and Italian Prime Minister Giuseppe Conte met on Saturday to discuss the budget.

Conte told journalists afterwards that the dinner had not been decisive and said they did not talk about deficit or debt goals, but said he was confident Rome could avoid the disciplinary measures.

In a report published on Sunday, Italian daily La Repubblica said that during the dinner Juncker had asked Conte to convince the government to lower the country’s 2019 deficit goal by at least 0.3 or 0.4 percentage points if Rome wanted to avoid the procedure.

He also said the government should tone down its criticism of European institutions to open the way to a compromise.

Conte promised to discuss Juncker’s proposal with Italy’s two deputy prime ministers when back in Rome, the paper said.

“They did not discuss about decimals,” a spokesman for the Italian prime minister said, commenting on the La Repubblica report about the dinner with Juncker.

Additional reporting by Gavin Jones in Rome; Editing by Catherine Evans

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