Italy/EU Commission avoids pursuing excessive deficit procedures over budget in return for less fund allocation to citizen’s income and pensions

Italy’s Conte government has reviewed the contents of its 2019 budget and in order to avoid EU Commission sanctions will lower the expected deficit to GDP ratio to 2.04% from the original 2.4%. In his speech to the Senate on 19 December, PM Conte re-iterated that “We have not yielded on the content… and I repeat the citizen’s income and the 100 threshold (Ed. note: for pensions) will go ahead as scheduled.” However, he continued saying, “resources necessary to fulfill these two measures are less than had initially been intended.” Initially the Italian government had earmarked a total of €16 billion (€9 billion for the citizen’s income and  €6.7 billion for pensions). Now Italian press sources indicate €4.6 billion less will be going towards the measures (€1.9 billion less for the citizen’s income and €2.75 billion less for pensions). More details will likely be revealed when the decree legislation is presented in January. The draft budget will also contain cutbacks for the highest pension earners by way of a less generous inflation indexation revaluation as well as a ‘solidarity contribution’ to be levied on ‘golden pensions’. The draft budget has until the end of the year to race through the Senate and then quickly return to the Chamber of Deputies for its final reading.