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Italy unlikely to commit to new 2020 deficit target–Report

Italy unlikely to commit to new 2020 deficit target–Report

Mubasher: Rome aims to hammer out a deal with Brussels over Italy’s public finances, without setting a new target for its next year’s budget deficit, Reuters reported, citing a top government official.

The Italian government plans to slash this year’s deficit goal to 2% or 2.1% of gross domestic product (GDP) in the next couple of days, down from 2.4% set in April, the government source told the news agency.

This came as the European Commission said that a disciplinary measure against Rome is justified, for it failed to lower its large public debt last year as pledged, while the debt pile is expected to rise this year and next.

The current deficit goal for next year stands at 2.1% of Italy’s GDP.

The coalition of the 5-Star Movement and the right-wing League is hesitant to commit to a new goal, but would instead pledge to reduce public spending and remove many tax cuts in place, the source said.

Italy hopes that this would go a long way to satisfying the European Commission, the government official added.