Europe
Italy's PM expects robust growth in 2019, higher than 1-pct forecast in budget
Last Updated: 2018-12-29 14:51 | Xinhua
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Italian Prime Minister Giuseppe Conte on Friday said he counted on a robust economic growth next year, possibly exceeding the forecast included in the national budget upon which the government has lately agreed with European Union (EU) authorities.

"We have a manoeuvre (budget law) that evolves in the direction of growth, and that abides by the 1-percent forecast made by most domestic and international entities," Conte told during a year-end press conference broadcast live in the Italian capital.

He explained this did not mean the cabinet expected a weak expansion, because all necessary pre-conditions for growing had been provided, including "a robust investment plan, and structural reforms that will create a relevant stimulus."

"The one percent (growth target) is a minimum threshold, but we have to go much further than that," Conte stressed.

Answering to reporters from all Italian media, the prime minister downsized the possible risks linked to the country's public debt -- which was some 131.8 percent of gross domestic product in 2017 according to latest data by the Bank of Italy.

Italy's debt is the EU's second largest after Greece, and since long a source of major concern in the eye of the EU and of international economic bodies, in terms of solidity of the euro-zone's third largest economy.

"The fundamentals of our economic system are very solid, and this is an aspect on which I have strongly insisted during talks with (EU authorities in) Brussels," Conte said.

"We have lived with our public debt for many years: it is something that must be kept under careful surveillance, but it is not so dreadful."

He added this perspective was based on the awareness that several of the country' economic features, including the second largest manufacturing industry in Europe, and a high level of private savings, were "reassuring".

Finally, Conte pledged his right-wing government would avoid triggering the so-called safeguard clauses, averting value-added tax (VAT) and other levies hikes in 2020 and 2021.

Such clauses require the government to increase VAT and other indirect taxes, when its spending-review process is not sufficient to respect the budgetary goals, according to EU rules.

"I would like you to not overlook the fact that, in a few months, we had to find 12.5 billion euros (14.3 billion U.S. dollars) to neutralize the VAT increase in 2019," the prime minister explained.

"We will continue with this method in 2020 and 2021 as well, since we are committed to preventing the hikes."

As Conte delivered his year-end press conference, the lower house was engaged in the final voting of the controversial 2019 budget law, which has to be definitely approved by the end of the year.

The senate passed the draft last week, after the cabinet won a confidence vote on it. Yet, the fast track imposed with the confidence procedure made it impossible for lawmakers to review and debate the contents of the budget, and that sparked an outcry from opposition forces.

For this reason, the proceeding was shortly suspended on Friday, after lawmakers scuffled in the chamber of deputies.

Conte's cabinet agreed last week with the EU Commission on presenting the current version of the 2019 budget in order to avoid a disciplinary procedure for excessive deficit.

The revised budget lowered the deficit spending target for 2019 from the original 2.4 percent of GDP to 2.04 percent.

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