Renzi govt warned fiscal policy not in line with EU

(ANSA) - Brussels, October 21 - European Commission Vice-President Valdis Dombrovskis said Wednesday that some of the tax-cutting measures contained in the government's 2016 budget bill are not in line with EU recommendations.
    "Some of the actions adopted at the fiscal policy level" by Italy "are not in line with the general recommendations" of the EU. Premier Matteo Renzi's government plans to abolish the IMU property tax and the property-based TASI tax on people's primary residences. The EC has repeatedly said it does not like the property-tax cuts in the 2016 budget bill, reminding Renzi that its standard recommendations to member States go in quite the opposition direction - to shift the burden from labour and consumption onto property among other things. The elimination of property tax IMU and property-related service tax TASI has also come in for criticism from the domestic opposition, which argues it is unfair to slash taxes on all residences, including castles and luxury villas whose owners can well afford to pay. Renzi has retorted by saying his government, unlike previous centre-left ones, is out to ease poverty but not at the expense of targeting rich wealth creators. However, he appeared to retract this in later comments when he said that castle owners would have to pay taxes.
    Dombrovskis added that the Commission was "assessing" Rome's request for greater budget flexibility due to the cost of the refugee crisis. The draft budget the government has sent to Brussels puts current spending on the migrant emergency at three billion euros, with a total cost of 3.3 billion euros. Of these, 50% is spent on hosting the asylum seekers and 20-30% is spent on rescuing them at sea. Italy is requesting deficit flexibility based on these numbers. The budget currently amounts to 27 billion euros but this may rise to 30 billion if the EU OKs a clause on the migrant emergency, allowing Italy to raise the budget-to-deficit ratio from 2.2% to 2.4% - equivalent to just over three billion euros.
    Renzi recently said that, if the EC asked for revisions to his executive's budget, Rome would send it back to Brussels unchanged. This week European sources said the Commission will likely not send Italy's budget bill back for revision. The climate after a first EC reading of the proposed budget is "positive" as Italy is said to be "more solid" than last year.