Italy set to back down in EU budget row

Rome: Italy looks set to defuse a row with the European Union (EU) after weeks of publicly defying officials in Brussels over its high-spending budget plans.
Its leaders wanted to “end poverty”, raising the deficit to 2.4 per cent of GDP.
But in an unprecedented move, the European Commission said they should revise the budget and tackle debt. Deputy Prime Minister Luigi Di Maio said on Monday his government might be willing to reduce the deficit target to end the standoff.
“If, during the negotiating process, the deficit has to be reduced a bit, that’s not a big deal,” Di Maio said. Italy’s draft budget contains expensive measures for introducing a guaranteed basic income of about €780 (£700) for poor families, and raising the retirement age.
“The important thing is that not one person misses out on the (pledged) measures,” Di Maio added. The apparent change of mind followed a weekend meeting in Brussels between Italian Prime Minister Giuseppe Conte and European Commission President Jean-Claude Juncker.
The revelations prompted share prices in Milan to soar while a keenly watched measure of economic turmoil in Italy, the “spread” between Italian and German bond prices, fell to 280 points amid expectations of a resolution to the crisis.
A meeting to discuss the details was scheduled for Monday evening. But it was not clear how any reduction in spending would be financed if key election promises made by the ruling populist League and Five Star parties remained untouched. Nor was it certain that the changes would be enough to satisfy the European Commission.
Matteo Salvini, the joint deputy PM and leader of the League, had already hinted at change on Sunday, saying “no-one is stuck” at a specific number for the deficit, the BBC reported.