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Italian PM says new budget plan will be ready 'in the coming hours'

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Italian PM says new budget plan will be ready 'in the coming hours'
Italy's Prime Minister, Giuseppe Conte (L) and Minister of Economy and Finance, Giovanni Tria. Photo: FILIPPO MONTEFORTE/AFP
09:02 CET+01:00
A revised version of the controversial 'people's budget' will be ready later today, Italian Prime Minister Giuseppe Conte said this morning.

Ministers have been busy revising the draft budget over the past few days in order to avoid excess deficit penalties from the European Commission.

Conte said the revised budget will be ready "in the coming hours," AFP reported.

"My objective is to avoid Italy being penalised in a way that hurts our country and risks also hurting Europe," Conte told Italian daily Avvenire.

"I'm finalising a proposal that the European Union will have to take into consideration. It will be ready in the coming hours."

He said the draft "does not compromise Italians' interests or the promised reforms" of the populist government.

Italians are watching closely to see if the most popular - yet priciest - policies promised during the election campaign, such as the “golden” pension policy, lower tax rates and citizens' income, are subject to changes.

"I have some projections on the economic impact of the '100-quota' (pension reform) and citizens' income. This can give me room to manoeuvre to spend and use in negotiations" with the Commission, Conte said.

Conte said last week he was “optimistic” that a deal could be agreed with the European Commission.

The government had initially said it would not move on the planned budget, but both sides have since softened their stances and rhetoric.

READ MORE: 'Budget of change': Italy announces plans to end austerity and rack up public debt

The EU Commission officially rejected Italy's draft budget on November 21, clearing the way for unprecedented sanctions and deepening a bitter row with Italy's government. 

Brussels said Italy should focus on cutting the deficit rather than aiming for fiscal expansion.

The so-called 'people's budget' planned for a deficit of 2.4 percent, considerably higher than the 0.8 percent the previous centre-right government had planned for.

The Italian parliament will begin voting on the contested budget next week.

READ ALSO: Here are the main things included in Italy's 'people's budget'

Some analysts fear that the government's fiscal plan could send Italy's economy into recession.

But Italy is already is troubled economic waters.

Unemployment is up and GDP down in an economic contraction not seen in Italy since the second quarter of 2014.

Italy's economy switched into reverse gear, recording a decrease of 0.1 percent in GDP for the third quarter of 2018.

The figures, compiled for the summer months by the Italian National Institute of Statistics (ISTAT) paint a gloomy picture for the Italian economy.

Employment data was also worrying. In October, Italy's unemployment rate rose to 10.6% and youth unemployment to 32.5 percent.

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