€5 billion boost for struggling Italian firms

The Italian government has paid €5 billion of its debt to businesses, out of a total of €20 billion to be paid this year, the Ministry of Economy and Finance said in a statement.

€5 billion boost for struggling Italian firms
Private businesses are owed an estimated €120-130 billion by the Italian government. Photo: Vincenzo Pinto/AFP

The announcement offers relief to private companies, which according to Italian employers’ federation Confindustria are owed €120-130 billion by the government.

To date the government has made €17.02 billion available to meet its commitments, the ministry said.

The Italian government had put off paying the companies as it struggled to overcome its public debt, forecast at 130.4 percent in 2013.

Prime Minister Enrico Letta’s coalition government, sworn in in April, has however taken more active steps to ensure businesses are paid their dues.

The Ministry of Economy and Finance said it intended to regularly publish new data in order to promote the series of payments to businesses.  

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Salvini vows not to yield to Brussels in Italy budget dispute

Italy's Deputy Prime Minister Matteo Salvini vowed Saturday not to back down in a dispute with Brussels over the country's budget as Rome scrambles to avoid EU punishment for failing to reduce its heavy public debt load.

Salvini vows not to yield to Brussels in Italy budget dispute
Matteo Salvini at a press conference following last week's European elections. Photo: AFP

The EU infuriated Rome this week by warning over its soaring debt, rekindling a process that could eventually see Italy hit with sanctions for breaking spending promises to the EU.

“Next week I will tell Brussels 'let us do what Italians request: fewer taxes and more jobs',” Salvini said during a political rally.

“And if they say 'no', we'll see who is more stubborn,” he added.

The country's public debt stands at 132.2 percent of GDP in 2018.

This is well above the 60 percent threshold set by European rules and next week the European Commission is expected to recommend opening an “excessive deficit procedure” as punishment.

Italy's populist coalition — Salvini's far-right League and the anti-establishment Five Star Movement (M5S) — told the commission late Friday it will review both the country's tax system and public spending.

“The government is setting up a comprehensive program to review the current spending” ahead of the budget law for 2020, Finance Minister Giovanni Tria said in a reply to Brussel's request for an explanation over Italy's finances.

The government will also review Italy's revenue, including taxes, Tria said.

The opening of the EU procedure, which needs to be validated by EU finance ministers, could result in financial sanctions of up to 0.2 percent of Italian GDP, equivalent to three billion euros.

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