Economy minister justifies delay in balancing budget

(ANSA) - Rome, April 17 - Economy Minister Pier Carlo Padoan on Thursday justified the government's controversial decision to inform the European Union that it was putting off the target of balancing the State budget in structural terms by a year until 2016.
    The minister said the executive could not go too far with fiscal consolidation as the economic recovery is weak after the country emerged from its longest postwar recession in the second half of last year.
    Another factor is the fact that the government has pledged to pay off scores of billions of euros of debts owed by various parts of the civil service and local governments to private-sector suppliers.
    "Despite the signs of recovery this year, it is still fragile and the situation on the job market remains very difficult," Padoan said referring to record unemployment levels of 13%, with over four in 10 under-25s out of work.
    "To help the payment of civil-service debts, the government intends to made use of the exception procedure (to delay meeting the balanced-budget target)".
    Padoan was speaking in the Senate, which is set to vote on the government's three-year economic blueprint, the Economic and Financial Document (DEF), on Thursday, as is the Lower House.
    The DEF, which includes Premier Matteo Renzi's ambitious programme of spending and tax cuts to help revive the economy, needs to be approved by parliament quickly so it can be delivered to the European Commission before the end of the month.
    The plan includes 10 billion euros in income-tax cuts targeting low-earners.
    Renzi has said the move will give people earning less than 25,000 euros a year an extra 80 euros in their monthly pay packets.
    The executive is set to bring in the tax cut by approving a decree at a cabinet meeting on Friday.