by Eric J. Lyman
ROME, Sept. 27 (Xinhua) -- The Italian government Thursday agreed to an outline for its 2019 budget deficit now expected to total 2.4 percent of the country's gross domestic product (GDP), higher than the guidance from the European Commission.
The deficit level is also higher than what was advocated by Giovanni Tria, the country's minister of finance.
Tria had vowed to keep the deficit below 2.0 percent as part of the government's efforts to pay down the deficit, which is the second highest in the European Union in terms of a percentage of GDP.
But the higher deficit figure is a victory for the Five-Star Movement and the League, the two parties supporting the government led by Prime Minister Giuseppe Conte which includes Tria as a minister.
The agreement came after a full day of negotiations between ministers and other leading members of the Conte government. It came too late in the day to impact financial markets, which had been steady leading up to the talks.
The populist, anti-establishment Five-Star Movement seeks to increase government spending for a basic income for all Italian citizens and to allow workers to retire earlier -- both measures economists say will increase the government's debt. Meanwhile, the conservative, anti-migrant League wants to establish a flat tax for businesses, which could reduce tax revenue.
The Italian media reported that Tria, who is not a member of either party, had threatened to resign if the deficit number was above 2.0 percent of GDP. But there was no immediate indication that Tria would do so.
