Italian government shares first budgetary plans, draws criticism from EU

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Italian government shares first budgetary plans, draws criticism from EU

The Italian government laid out its controversial-yet-populist budget even as the acceptance triggered criticism from the European Union and raised differences within the government. The budget proposal of the ruling coalition government of the League and Five Star Movement stuck to their pre-election promise of bringing about a populist government in the country, which would focus on helping the poorer sections of the economy thereby helping to remove poverty in the country.

The budget proposal has, thus, set Italy's budget deficit to 2.4% of the country's gross domestic product for not only 2018, but right up to 2021. While this is well below the EU's mandated budget deficit of 3%, what has ruffled many feathers is the debt to the European Union.

As it stands, Italy has the second-highest rate of debt within the EU – after Greece – at about 131% of the GDP. The country's finance minister, Giovanni Tria had foreseen this problem and had, in his proposal, attempted to further reduce the country's budgetary deficit to less than 2%.

Following the budget proposal, Tria had wanted to put down his papers and end his term but was urged by the ruling party to not do so. The budget proposal now needs to be accepted not only by the Italian parliament but also needs to be submitted to the European Commission by the same month.

Following the announcement of the budgetary plan, the Italian stock market fell with banking companies reporting a relatively steeper fall.