Italy’s draft budget assumes a rise in the structural deficit, the measure excluding business cycle swings and one-off expenditure and revenue, of 0.1 per cent of GDP.
Under EU rules, it should fall 0.6 per cent of GDP.
“The projected change in the structural balance in 2020 would not constitute a significant deviation,” economy minister, Roberto Gualtieri, said in response to an EU letter demanding clarification over its budget for next year.
In a letter sent to Rome on Tuesday, the European Commission stated that a preliminary assessment of Italy’s draft showed it fell short of EU fiscal recommendations to reduce spending.
Rome said it wants to focus on reviving its stagnant economy.
“While mindful of the need to put Italy’s debt-to-GDP ratio on a clear downward path, we believe that the key goal is to rekindle economic growth”, Gualtieri said in the letter.
Italy has the second-highest public debt in the EU after bailed-out Greece, but it has made little progress in reducing its deficit toward a balanced budget in recent years as EU rules prescribe.
