Salvini Says Italy’s 2020 Budget Deficit Won’t Stay Below 2%

(Bloomberg) -- Italy's government won't be able to contain the budget deficit below 2% if it's going to deliver promised investments and tax cuts, Deputy Prime Minister Matteo Salvini said.

“If we want to put real money in Italians' pockets and not a mere reallocation of funds, it's clear we cannot stay below 2%,” Salvini said at a press conference in Rome after meeting with unions and business lobbies. “We will have negotiations with the European Commission,” but the rules set by Brussels are not “sacred.”

Salvini, who is also the country's Interior minister, scored a big win in Parliament late Monday, when the Senate approved a decree that grants him more powers to tackle migration and crime. He has now stepped up demands that the government deliver on his priorities.

Read more: Salvini Eyes Enhanced Powers as Italy Government Wins Key Vote

Finance Minister Giovanni Tria, a university professor with no previous political experience, aims to keep next year's deficit below 1.8%, newspaper la Repubblica reported on Monday.

Salvini acknowledged his views on next year's budget contrast with Tria's. “It's impossible to do the budget at zero cost,” Salvini said.

Earlier this year, the coalition government supported by Salvini's League and Luigi Di Maio's Five Star Movement clashed with European partners over Italy's inability to keep its debt in check.

To avoid disciplinary action by the Commission, Rome agreed to keep this year's budget shortfall at 2%, but the confrontation with Brussels is expected to be reignited when talks about the 2020 budget start in earnest in September.

To contact the reporter on this story: Chiara Albanese in Rome at calbanese10@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Alessandro Speciale, Dan Liefgreen

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