Italy economy minister urges calm in EU talks

Italy's economy minister, Giovanni Tria, on Tuesday called on Rome to "tone down the hostility" toward the EU after government colleagues had rebuked senior EU figures critical of Italy's budget plans.

"It is well known that the European Commission … has expressed concern" about the government's plans," Tria said in a parliamentary hearing in Rome. "There will now be a constructive discussion with Europe to show the well-founded reasons for this government's growth strategy," he added.

Rome recently passed a budget for 2019 that has been criticized by the European Commission for breaking EU budget discipline rules. The EU's executive warned last week that the plans would triple previous deficit goals and represented "a significant deviation from the fiscal path recommended by the Council."

Read more: Fitch ratings agency revises Italy debt outlook to negative

The Commission said the budget increase in borrowing could be unsustainable given Italy's huge level of debt, which at 131 percent of GDP is the highest in Europe after Greece, with government borrowing costs spiking.

Tria said Italy's structural deficit would fall once growth and employment returned to pre-crisis levels.

No turning back

Italy's populist government, made up of the League and the anti-establishment Five Star Movement (M5S), plans to raise borrowing to stimulate the economy and boost welfare spending, while lowering the retirement age and cutting taxes.

The leaders of the two ruling parties, Luigi Di Maio and Matteo Salvini, have said they will not go back on their spending plans, which were a key part of their election manifestos in March.

Mixed messages

The speaker of the lower house of parliament, Roberto Fico, called for moderation on a visit to Brussels on Monday, although Deputy Premier and Interior Minister Matteo Salvini renewed his attack on European Commission President Jean-Claude Juncker and EU Economy Commissioner Pierre Moscovici.

Salvini described the two men as "the enemies of Europe who are hunkered down in the Brussels bunker, the enemies of the happiness of Europe's people."

jbh/kms (dpa, Reuters)

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