Italy's new 2019 deficit plan still not enough

Italian Prime Minister Giuseppe Conte made the offer Wednesday in a meeting with European Commission President Jean-Claude Juncker in Brussels.

Italy's new 2019 deficit plan still not enough

A new 2019 budget plan from the Italian government to reduce its deficit to 2.04 percent of GDP is still not enough to secure EU approval, Economic Affairs Commissioner Pierre Moscovici said Thursday.

"It's a step in the right direction, but nonetheless I have to say we're still not quite there. There are still more steps to take," the EU's Moscovici told French senators in Paris after Rome's latest proposal to avoid financial penalties from Brussels.

"Technical work allowed us to obtain a margin of negotiation because we have recovered some financial resources," Conte said afterwards.

The European Commission in October rejected the big-spending budget submitted for approval by the Italian coalition government of the far-right League and the anti-establishment Five Star Movement.

It included a universal basic income of 780 euros for the least well-off to help them get back into the job market, and would have left Italy with a deficit at 2.4 percent of GDP.

Although that is below the EU-mandated limit of 3 percent, EU officials said it did not sufficiently tackle Italy's huge debt pile, which stands at 130 percent of GDP.

They also said the ambitious spending plan was based on overly optimistic economic assumptions for next year.

If an agreement is not reached, Rome could find itself the target of an EU excessive deficit procedure, which could ultimately lead to fines of up to 0.2 percent of GDP.