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Italian PM seeks reform in Europe after winning confidence vote

Italian Prime Minister Giuseppe Conte called Monday for the reform of European Union budget rules and cooperation on immigration as his new government won a parliamentary confidence vote.

Italian PM seeks reform in Europe after winning confidence vote
Italian Prime Minister Giuseppe Conte before giving his speech to parliament on Monday. Photo: Andreas Solaro/AFP

After a heated debate, 343 MPs backed the incoming coalition of the anti-establishment Five Star Movement and centre-left Democratic Party, while 263 voted against, according to the official count.

Much of Conte's first speech to parliament earlier in the day was dedicated to chiding the previous populist coalition for endless bickering, and promising the new government would be better behaved.

The most pressing issue for the new coalition will by the upcoming 2020 budget, a key test for relations with Brussels.

READ ALSO: Four key economic challenges facing Italy's new government

Conte called for the EU's Stability and Growth Pact, which limits budget deficits to three percent of gross domestic product in member states, to be “improved” and simplified.

The pact was the main bone of contention between the European Commission and the previous populist government in heavily indebted Italy, which must submit a balanced budget to Brussels in the coming weeks.

READ ALSO: Here is Italy's new cabinet in full

Should it fail to do so, Italy could face an automatic rise in value-added tax on January 1 to bring in more funds — punishing the poorest the hardest.

However former Austrian chancellor Sebastian Kurz, who heads of the country's conservative People's Party (OeVP), rejected any softening of EU rules.

“Italy must not become a second Greece. In any case, we are not prepared to pay Italy's debts!” Kurz tweeted on Monday.

Conte said the government would step up efforts to improve the lives of the poor and disadvantaged, from income support for the lowest earners to help for the disabled, earthquake victims, and working mothers, as well as tackling gender inequality.

Italy's new Interior Minister Luciana Lamorgese (L) speaks to Prime Minister Giuseppe Conte prior to his speech on Monday. Photo: Andreas Solaro/AFP

He promised Italians that, after a season of bitter fighting and hate propaganda, the new watchword would be respect.

“We cannot in the coming months waste our time with disputes and clashes,” he said, adding that the government must act with “new humanism” rather than arrogance.

Fights and fascism

Demonstrators from the hard-right League and its smaller ally the Brothers of Italy party descended on the square outside parliament, some chanting “Duce! Duce!”, the title fascists used to address wartime dictator Benito Mussolini.

“We will be a serious opposition, in parliament but also among the people, from north to south, one town after another,” League leader Matteo Salvini said, slamming the new alliance between the former party foes.

The former strongman kissed and held aloft his rosary – a political use of a religious object which has irked many Catholics.

ANALYSIS: How Matteo Salvini lost his gamble to become Italy's PM – for now

Conte said the country was on the threshold of a “season of reforms”, which would work to ease Italy's colossal public debt, currently more than 2.3 trillion euros or 132 percent of GDP — the highest rate in the eurozone after Greece's.

Brussels has constantly called on the eurozone's third-largest economy to reduce its deficit and the accumulated debt. It frequently clashed with the outgoing populist government over its big-spending plans.

The previous coalition eventually agreed to reduce the annual deficit to 2.04 percent of GDP in 2019, instead of 2.4 percent.

On the hot-button topic of migration, Conte disappointed human rights activists who had hoped he would announce a sharp about-turn on Salvini's controversial immigration laws, although he did say integration measures would be boosted.

He said promises of solidarity between EU member states were not enough, and insisted that both Italy and the bloc must stop treating the migration phenomenon in crisis mode, but implement concrete measures such as humanitarian corridors.

As Conte spoke, the Sea-Watch charity tweeted that their reconnaissance plane had spotted a dinghy “in distress with around 30 people on board” off Libya “with nearly no search and rescue capacities at sea to rescue them”.

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COST OF LIVING

Fuel tax cut and help with energy bills: Italy approves inflation aid package

Italy on Thursday night approved new measures worth around 17 billion euros ($17.4 billion) to help families and businesses manage the surging cost of fuel and essentials.

Fuel tax cut and help with energy bills: Italy approves inflation aid package

As expected, the final version of the ‘aiuti-bis‘ decree provides another extension to the existing 30-cents-per-litre cut to fuel duty, more help with energy bills, and a tax cut for workers earning under 35,000 euros a year.

The package also includes further funding for mental health treatment: there’s another 15 million euros for the recently-introduced ‘psychologist bonus’ on top of the 10 million previously allocated.

READ ALSO: What is Italy doing to cut the rising cost of living?

There are also measures to help agricultural firms deal with this year’s severe drought.

Italian Prime Minister Mario Draghi described the new package as an intervention “of incredible proportions”, which corresponds to “a little over 2 points of national GDP”.

However, he said, no changes were made to the national budget to pave the way for the new measures.

The measures will be funded with 14.3 billion euros in higher-than-expected tax revenues this year, and the deployment of funds that have not yet been spent, Economy and Finance Minister Daniele Franco said.

Italy has already budgeted some 35 billion euros since January to soften the impact of rising fuel costs.

The decree is one of the last major acts by outgoing Prime Minister Mario Draghi before an early general election next month.

Elections are set for September 25th but the former European Central Bank chief is staying on in a caretaker role until a new government is formed.

Draghi said the Italian economy was performing better than expected, citing the International Monetary Fund’s estimate of three percent for 2022.

“They say that in 2022, we will grow more than Germany, than France, than the average of the eurozone, more than the United States,” he told a press conference.

But he noted the many problems facing Italy, “from the high cost of living, to inflation, the rise in energy prices and other materials, to supply difficulties, widespread insecurity and, of course political insecurity”.

Inflation hit 8 percent in Italy in June – the most severe spike the country has experienced since 1976.

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