'Outdated' deficit limits kept, but rise possible says Renzi
Tax cuts, spending may nudge 2.6% forecast higher19 March, 16:06
Aiming to jolt the sclerotic economy out of a slow recovery from Italy's worst recession since World War II, Renzi plans to cut income taxes by 10 billion euros, invest 1.74 billion euros in social housing programs, spend 3.5 billion euros on schools and repay 68 billion euros in outstanding bills, among other things.
Recent reports said Renzi had planned to broach the sensitive issue of deficit limits when he met Monday with German Chancellor Angela Merkel at their first bilateral since he was sworn in as premier last month. At the meeting, Merkel praised Renzi's "ambitious" plans and expressed certainty in Italy's commitment to stay below the EU-enforced limit. Italy must be careful to avoid breaching it, as it did in 2009. The European Commission subsequently opened an excessive-deficit procedure against Italy, obliging it to divert public money into trying to reduce that ratio.
It was taken off the procedure last year after bringing the ratio below 3%.