Govt denies corrective action needed to economic blueprint

FI's Brunetta says Renzi's budget numbers do not add up

(ANSA) - Rome, April 28 - The Italian government denied Monday that it had any plans for corrective budget action after an opposition politician suggested it could not afford its promises and would have to make changes. Economy Minister Pier Carlo Padoan joined other government sources in saying that no changes are in the works to the Economic and Financial Document (DEF) that outlines the plans to kick-start the sluggish economy.

Premier Matteo Renzi's DEF was approved almost two weeks ago in parliament and sent for review by the European Commission, along with official notice that Italy is postponing by one year the target of balancing the State's structural budget. "We are waiting for the verdict (from European authorities on the DEF)", said Padoan.

He added that further measures to "strengthen and extend" the results of the spending review for next year's financial stability act are in play and that fighting tax evasion will be a "priority area" when Italy assumes the duty presidency of the European Union for a six-month stint beginning in July.

Controversy was stirred earlier in the day when Renato Brunetta, party whip for Forza Italia (FI) led by ex-premier Silvio Berlusconi, said that the measures in the DEF including 10 billion euros in tax cuts for 10 million lower-income Italians were not affordable. "The reality is incontrovertible, corrective action will be required (to the existing DEF)", said Brunetta. "(The government) can deny what it wants, but the reality of the accounts is incontrovertible," said Brunetta. The cost of the tax cuts this year alone, totalling about 6.6 billion euros, as well as a reduction to a regional business tax, plus other spending programs this year will not be covered by savings the government has found, said Brunetta.

However, Renzi has said the cost of the blueprint has been completed covered by savings found in an ongoing review of government spending, a new bank tax, and a cap on salaries for some public-sector managers.