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BRUSSELS

Italian lawmakers vote through Brussels-baiting budget

Italian deputies on Friday voted overwhelmingly in favour of a draft 2017 budget that the European Commission has warned will breach EU rules on the management of public finances.

Italian lawmakers vote through Brussels-baiting budget
Italy's Chamber of Deputies during a visit by UN Secretary General Ban Ki Moon in October. Photo: Andreas Solaro/AFP

A vote of confidence designed to curtail debate on the first reading of the budget bill was carried by 348-144 votes, making its definitive approval by the lower house of parliament on Monday a formality.

Italy was one of eight eurozone countries warned last week that they could face fines and restricted access to funds from Brussels over their failure to stick to the EU's Stability Pact rules.

Under centre-left premier Matteo Renzi, Italy has been the most upfront about its intention to defy the Commission with growth-orientated spending plans for next year.

Italy is proposing to run a budget deficit of 2.4 percent of GDP for the year, significantly higher than the 1.8 percent level it had promised to deliver earlier this year.

Renzi says the slippage is justified as Italy needs to spend to get its economy moving after years of stagnation or worse.

He also wants costs incurred over the migrant crisis and recent earthquakes stripped out of the calculation of how Italy is doing against the standards set by the EU.

The issue has provoked sharp exchanges in recent weeks with Renzi seen in some quarters as Brussels-bashing in the run-up to a December 4 referendum on constitutional reform, on which he has staked his political future.

New spending plans in the budget include two billion euros more for healthcare, one billion for education and measures to help small companies and poorer families.

Renzi said earlier this month that he would no longer bow to “diktats” from Brussels over fiscal restraints he regards as counterproductive at a time when most of the eurozone is struggling.

He has also threatened to block the approval of the EU institutions' collective budget if other countries do not offer Italy more help in coping with the arrival of thousands of migrants on its southern shores.

A 2017 deficit of 2.4 percent of GDP would leave Italy comfortably within the EU ceiling of three percent.

But the Commission's economists say Rome should bring down its deficit faster to ensure that the upward trend in the country's huge debt mountain — equivalent to over 130 percent of GDP — is reversed.

The 2017 budget law will only be definitively approved once it has been examined by the second chamber of parliament, the Senate, which has not scheduled any debate on it until after the December 4 referendum.