EU Commission ready to accept Italy deficit target of 1.95 percent, Finance Minister pushes for 2 percent – La Repubblica

FILE PHOTO: Italian Prime Minister Giuseppe Conte arrives at an extraordinary EU leaders summit to finalis

MILAN (Reuters) – The European Commission is willing to accept an increase in Italy’s deficit target to 1.95 percent for next year, daily newspaper La Repubblica said on Tuesday. The EC has rejected Rome’s draft budget which says the deficit will rise to 2.4 percent of gross domestic product (GDP) in 2019 from 1.8 percent this year. Brussels says it breaks previous commitments to reduce borrowing and will not lower Italy’s large public debt. Italy’s Finance Minister Giovanni Tria is pushing the government to reduce its deficit target to 2.0 percent, to find a compromise with Brussels and avoid a procedure over the country’s budget, La Repubblica added. Rome has in recent weeks shown willingness to reduce the deficit target. But it remains unclear how far it plans to go. Italy’s Prime Minister Giuseppe Conte will meet the commission’s president Jean-Claude Juncker on Wednesday in an attempt to avoid the procedure which would keep Italy under prolonged market pressure and could lead to fines, cuts of EU funds and other financial sanctions.