Italy set to approve €10bn in spending cuts

Italy set to approve €10bn in spending cuts
Premier Matteo Renzi's cabinet will review the new economic blueprint from Tuesday. Photo: Thierry Charler/AFP
Premier Matteo Renzi's cabinet is expected to approve ten billion euros in spending cuts for 2015 as it seeks to reduce its €2.2 trillion public debt.

The spending cuts, which are also intended to fund a tax rebate for people on low incomes that was introduced last year, are part of a new economic blueprint that will be reviewed by the cabinet on Tuesday, Ansa reported.

Italy cut its deficit target for this year to 2.6 percent of GDP from 2.9 percent last October, in a bid to win approval for its budget from the EU.

Renzi also recently increased Italy’s growth forecast to 0.7 percent in 2015, up from 0.5 percent forecast in October.

Debate on reforms, including a controversial proposal to increase value-added tax (VAT), is expected to continue until Friday.

The hike, which could take effect from 2016 to 2018, has been suggested as a "safeguard" against an increase in the budget deficit, although critics say the move could greatly depress the economy further, Ansa said.

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