Italy unveils draft budget to spark growth

AFP - [email protected]
Italy unveils draft budget to spark growth
Italy's 2014 budget will have "less spending, less debt and less tax". Photo: Flickr

Italy's government on Tuesday approved a 2014 budget that will have "less spending, less debt and less tax" to help sustain a gradual economic recovery it hopes will start later this year.


Prime Minister Enrico Letta said political tensions within his uneasy right-left coalition had "not made the task very easy", and the budget still has to go to parliament for final approval.

The draft includes tax breaks totalling €14.6 billion  over three years, of which €5.0 billion and €5.6 billion for businesses, officials said.

Letta said there would also be more incentives for businesses to hire young workers on long-term contracts amid record-high youth unemployment.

He also dismissed reports in the Italian press of cuts in the social welfare and health budgets.

He said spending would however be reduced for national and regional administrations and that extra funds would be drummed up for state coffers through the selling off of state properties.

The draft budget aims for a public deficit of 2.5 percent of gross domestic product (GDP) in 2014 - below the European Union-mandated threshold of 3.0 percent which Italy is struggling to respect.

Finance Minister Fabrizio Saccomanni said the budget "reinforces the potential for economic growth and stimulates the recovery".

"We will not have China-style growth but I am sure this intervention will bring Italy out of recession," Saccomanni said.

Italy has been stuck in recession for two years and the economy is held back by a mountain of debt.

Economists are sceptical that the recovery will start this year, although there have been some encouraging signs like a pick-up in exports.


Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.

Please log in to leave a comment.

See Also