(Bloomberg) -- Italian Deputy Prime Minister Matteo Salvini vowed to press ahead with so-called mini-bills, small-value notes to repay some of the state's commercial debts, contradicting his finance minister and adding fuel to the controversy over the proposal.
"Not only are mini-BOTs included in the government pact, but they have been approved by the lower house," Salvini said during an event in Rome. "We're going ahead, unless someone knows of a smarter tool."
To read more: Why Investors Flinch Over Italy's Mini-Bills Plan
The idea of using small-value notes for payments, mostly from the public administration, has grown into a national obsession in recent weeks.
The governing coalition of Salvini's League party and the anti-establishment Five Star Movement included the idea in its May 2018 legislative agenda, but since a non-binding motion was approved by the lower house of parliament, the Treasury has denied there are any plans to issue such securities.
Finance Minister Giovanni Tria reiterated that opposition on Tuesday, saying he doesn't think the instruments, sometimes known as mini-BOTs, will ever be introduced. Speaking at the same event later, Salvini said that a finance minister has to be able to cut taxes. "Cutting taxes is an emergency," he said.
The controversy has even prompted European Central Bank President Mario Draghi to say the instruments would either be considered money, and therefore illegal in the euro area, or a new form of debt that would add to Italy's huge outstanding obligations, which already amount to 133 percent of gross domestic product.
The wide array of takes by Italian officials has only served to keep the debate bubbling. While Tria has stayed on topic, after saying last week the notes' use as currency would be illegal, Cabinet Undersecretary Giancarlo Giorgetti chimed in that they could be a viable solution for Italy.
--With assistance from Lorenzo Totaro and Dan Liefgreen.
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, Jerrold Colten, Marco Bertacche
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