During the meeting, Five Star Movement (M5S) leader Luigi Di Maio and League leader Matteo Salvini proposed a larger deficit than economy minister Giovanni Tria was willing to accept.
No final decisions were made and the discussion will continue over the coming days, a government source confirmed.
“The choices in the budget law have to be courageous and have to be made in the interests of the citizens,” Di Maio said after the meeting.
Italian daily Corriere della Sera reported on Monday that Tria wanted to prevent the 2019 budget deficit from rising above 1.6 per cent of the country’s gross domestic product (GDP).
A government official said both Di Maio and Salvini were pushing for a deficit of between 2.0 and 2.5 per cent to fund their main electoral promises, including the introduction of a “universal wage” for the unemployed and the watering down of a previous pension reform.
“Experts from the two groups are working constantly to rake back waste and above all to guarantee the introduction of needed and courageous reforms,” Salvini said on Monday.
Italy’s public debt is around 132 per cent of GDP, the highest in the euro zone after Greece’s, and markets are worried it may rise again if government borrowing increases.
Tria, who belongs to no party, is considered a defender of market discipline against the ambitious demands of the M5S-League coalition.
The government must set its deficit and debt targets for 2019 by September 27, and present the budget to parliament by October 20.
